Iron is an important catalyst for free oxygen radicals and lipid peroxidation reactions which may play a role in the pathogenesis of several diseases in premature infants. During the early neonatal period, extracellular iron is available in excessive amounts. We hypothesized that administration of erythropoietin (EPO) mobilizes iron from plasma and inhibits iron-catalyzed reactions. To evaluate this hypothesis, recombinant human EPO (rhEPO) was administered s.c. to premature rabbits delivered at 29-d gestation: one group was kept in room air (RA) and the other in a 100% oxygen environment. Within each group, the animals were randomized to receive placebo or rhEPO at 400 or at 800 U/kg on d 0 and 2 of life. On d 3 or 4, plasma iron and iron saturation of transferrin were assessed. Lipid peroxidation was analyzed in plasma and bronchoalveolar lavage fluid (BAL). Nonsedimentable protein (NSP) and phospholipid content were measured in BAL. Erythropoiesis was evaluated in liver and bone marrow. Treatment with rhEPO decreased plasma iron, decreased iron saturation of transferrin, increased reticulocytes, and increased erythropoiesis in liver and bone marrow in both RA and hyperoxia group. Oxygen exposure increased NSP in BAL and decreased the ability of BAL to inhibit lipid peroxidation as measured by malondialdehyde (MDA) generation compared with RA exposure. In O2-exposed animals, EPO treatment increased the ability of both plasma (EPO 800) and BAL (EPO 400 and 800) to inhibit lipid peroxidation and decreased NSP in BAL (EPO 400). In addition, rhEPO treatment decreased alveolar thickening and proteinaceous exudate in the hyperoxia group. We propose that by stimulating erythropoiesis, rhEPO mobilizes non-heme iron and decreases oxidant injury that depends on the availability of transient metal.