Background—Anemia frequently occurs in chronic heart failure (CHF) patients and is associated with a poor prognosis. A low hematocrit may result from an increased plasma volume (hemodilution) or from reduced red blood cell volume (true anemia). The prevalence and clinical outcome of CHF patients with hemodilution is unknown.Methods and Results—The prevalence of anemia and its effect on outcome was examined in 196 patients with CHF. The prevalence of hemodilution was assessed in a subset of 37 ambulatory anemic patients with I131-tagged albumin to measure red blood cell and plasma volume. Clinical outcome was monitored. Sixty-one percent of the CHF patients were anemic. The prevalence of anemia increased from 33% in patients with New York Heart Association class II heart failure to 68% in class IV CHF patients. Survival was reduced in anemic patients compared with patients with a normal hematocrit (P<0.05). In the subset of 37 anemic patients, 17 patients (46%) had hemodilution and 20 patients (54%) had a true anemia. Nine patients with hemodilution died or underwent urgent transplant compared with 4 patients in the true anemia group (P<0.04).Conclusion—Hemodilution is common in CHF patients. Anemia is associated with a poor prognosis in CHF. Patients with hemodilution tend to do worse than patients with true anemia, which suggests that volume overload may be an important mechanism contributing to the poor outcome in anemic CHF patients.