Anemia is the most common hematologic abnormality in patients with chronic renal failure. The reasons for anemia in chronic renal failure are many and include erythropoietin and iron deficiencies, inflammation, infection, aluminum toxicity, and hyperparathyroidism. Iron deficiency alone affects more than 50% of patients on dialysis, and the estimated iron loss for these patients is 1.5 to 3 grams per year. The use of erythropoietin has also uncovered iron deficiency in a multitude of patients. Iron and erythropoietin supplementation has often restored normal or near-normal levels of hematocrit in these patients and has therefore improved some of the symptoms classically connected with chronic renal failure, such as fatigue, cold intolerance, and mental sluggishness, among others. Resistance to erythropoietin is frequently observed in the maintenance care for dialysis patients, and the most common reason is iron deficiency. It is important to understand the physiology of renal anemia, erythropoiesis and iron metabolism in order to avoid mistakes and misconceptions in the management of iron in chronic dialysis patients. In this article, we review several mistakes, misconceptions, practices, and guidelines in iron supplementation therapy. We also review the physiology of anemia in renal disease and the importance of erythropoietin and iron in causing anemia and discuss recent Dialysis Outcomes Quality Initiative (DOQI) guidelines on the topic.