Hypoxia can induce erythropoiesis through regulated increase of erythropoietin (Epo) production. We investigated the direct influence of oxygen tension (pO(2)) in the physiologic range (2-8%) on erythroid progenitor cell differentiation using cultures of adult human hematopoietic progenitor cells exposed to decreasing (20% to 2%) pO(2) and independent of variation in Epo levels. Decreases in hemoglobin (Hb)-containing cells were observed at the end of the culture period with decreasing pO(2). This is due, in part, to a reduction in cell growth and, at 2% O(2), a marked increase in cell toxicity. Analysis of the kinetics of cell differentiation showed an increase in the proportion of cells with glycophorin-A expression and Hb accumulation at physiologic pO(2). Cells were characterized by an early induction of gamma-globin expression and a delay and reduction in peak levels of beta-globin expression. Overall, fetal Hb and gamma-globin expression were increased at physiologic pO(2), but these increases were reduced at 2% O(2) as cultures become cytotoxic. At reduced pO(2), induction of Epo-receptor (Epo-R) by Epo was decreased and delayed, analogous to the delay in beta-globin induction. The oxygen-dependent reduction of Epo-R can account for the associated cytotoxicity at 2% O(2). Epo induction of erythroid transcription factors, EKLF, GATA-1, and SCL/Tal-1, was also delayed and decreased at reduced pO(2), consistent with lower levels of Epo-R and resultant Epo signaling. These changes in Epo-R and globin gene expression raise the possibility that the early increase of gamma-globin is a consequence of reduced Epo signaling and a delay in induction of erythroid transcription factors.