Anemia of prematurity (AOP) affects almost all infants that are born prematurely. Excessive phlebotomy in the NICU setting has exacerbated this condition. Until recently, erythrocyte transfusion has been the only therapy for AOP. Recombinant human erythropoietin (rh-EPO) has been shown to be effective in reducing erythrocyte transfusions in premature infants with AOP. Various studies have utilized rh-EPO as a treatment modality or as prophylaxis for AOP. The results of these studies have shown that rb-EPO is a complementary strategy along with restriction of phlebotomy and less liberal transfusion policies, to decreasing the number of transfusions that an infant may need. Trials are necessary to document the cost-effectiveness of rh-EPO as well as its long term effects on the premature infant.