The kidney is the main site of erythropoietin (EPO) formation. Oxygen sensing in the kidney itself plays a major role in the control of EPO synthesis. By in situ hybridization it has been established that the EPO-producing cells are situated in the interstitium of the cortical labyrinth, but they have not been precisely identified. Morphological findings provide new insights into the location and mechanism of oxygen sensing in the kidney. In addition to causing an increase in the number of cells containing EPO messenger RNA, anemia provokes structural changes exclusively in the cortical labyrinth. Specifically, the fibroblasts become enlarged and show increased activity of 5'-nucleotidase, and the S1 segment of the proximal tubule shows similar alterations as in various models of hypoxia. Thus, structures that are situated in the close vicinity of the EPO-producing cells appear to be sensitive to decreased oxygen delivery.