Infection may be associated with failure of erythropoiesis, and endotoxin has been shown to cause a decrease in the number of erythroid cells in the marrow of mice. We have investigated the effect of endotoxin on erythropoiesis in BDF1 mice by studying its effect on the incorporation of intravenously administered 59Fe into peripheral red cells. In normal mice the injection of endotoxin 2 and 3 days prior to the administration of 59Fe results in suppression of its incorporation into red cells. In exhypoxic polycythemic mice, endotoxin suppresses the response to erythropoietin injection when the endotoxin is given prior to or at the same time as the erythropoietin. This effect is much less marked when endotoxin is given after erythropoietin. We conclude that endotoxin either 1) impairs the function of erythropoietin-responsive cells, 2) competively decreases erythroid progenitors by stimulating granulocytes, or 3) inactivates erythropoietin.