The pathogenesis of anemia in patients with end-stage renal disease was studied by assessing the effect of uremic serum on the proliferation and maturation of erythroid progenitor cells, BFU-E and CFU-E, into colonies in vitro. Nucleated peripheral blood cells from 10 anemic patients produced normal or increased numbers of BFU-E colonies in response to added erythropoietin when cultured in control serum, but declined a mean of 63% when autologous uremic serum was substituted. Uremic sera from 90 patients cultured with normal human marrow produced a mean decrease in BFU-E colony growth of 72%, and of CFU-E colony growth of 82%, compared to control serum. Neither hemodialysis nor peritoneal dialysis was effective in removing the inhibitor. We conclude that patients with uremia have adequate circulating erythroid progenitors that respond to erythropoietin normally when removed from the uremic environment, and that uremic serum is toxic and inhibitory to erythropoiesis. This may be an important mechanism in the anemia of chronic renal failure.