Erythropoietin (EPO) plays a key role in erythropoiesis and is expressed predominantly in the fetal liver and in the adult kidney. The EPO gene is up-regulated at the transcriptional level under hypoxic/anemic conditions. We studied the role of the 5'- and 3'-flanking sequences of the mouse EPO gene in its tissue-specific and hypoxia-induced expression by developing transgenic mouse lines carrying chimeric EPO-lacZ gene constructs. Transgenic mice carrying a 6.5 kb segment of the 5'-sequence and most of the EPO gene in which lacZ was substituted for exon 1 (5'-lacZ-EPO) demonstrated induction of lacZ expression following hypoxia/ anemia induction in both the liver and kidney of adult mice. However, transgenic mice carrying the above construct along with the 1.2 kb 3'-flanking sequence (5'-lacZ-EPO-3') showed a high level of lacZ expression following hypoxia/anemia induction in adult kidney but not in adult liver. With the aim of further understanding the role of the 3'-flanking sequence in tissue-specific expression of the EPO gene, we studied the interactions of protein factors with this 1.2 kb 3' region and demonstrated that multiple sets of protein factors interact tissue specifically with a 10 bp sequence, TCAAAGATGG, located downstream of the previously characterized 3' hypoxia-responsive enhancer element.