Red blood cell production and the supply of oxygen to the tissues is tightly controlled by a negative feedback mechanism involving the kidney. Any fall in the level of oxygen is sensed by the kidney, which then synthesizes the erythroid growth factor, erythropoietin (Epo). This growth factor acts upon bone marrow erythroid precursors to increase the number of circulating red blood cells thus correcting the oxygen deficit. The EPO gene, which encodes erythropoietin, is transcriptionally regulated by the Hypoxia Inducible Factor (HIF) transcription complex. The HIF complex is composed of two different subunits, alpha and beta (also known as ARNT), both constitutively expressed. The alpha subunit is continually synthesized but in the presence of oxygen it is undetectable due to degradation by the proteasome. A family of enzymes, prolyl hydroxylase domain proteins (PHD) of which there are 3 members (PHD1, PHD2 and PHD3), are able to hydroxylate key prolines in the oxygen dependent degradation (ODD) domain of HIFalpha and these enzymes are only active in the presence of oxygen (Fig 1). The von Hippel Lindau (VHL) protein is able to associate with HIFalpha once it is hydroxylated and then molecules of ubiquitin are added. This is the signal that sends HIFalpha to the proteasome for degradation. As the level of oxygen falls the PHD enzymes are no longer active resulting in less and less HIFalpha being degraded (Fig 1). Consequently, all the genes under the control of the HIF transcription complex, which includes EPO, are elevated. Once the oxygen deficit is corrected by the enhanced production of red blood cells the oxygen tension rises and HIFalpha is increasingly degraded.