Inflammation is a physiological defense response, but may also represent a potential pathological process in neurological diseases. In this regard, microglia have a crucial role in either progression or amelioration of degenerative neuronal damage. Because of the role of hypoxia in pro-inflammatory mechanisms in the nervous system, and the potential anti-inflammatory protective effect of erythropoietin (Epo), we focused our investigation on the role of this factor on activation of microglia and neuroprotection. Activation of microglial cells (EOC-2) was achieved by chemical hypoxia induced by cobalt chloride (CoCl2 ) and characterized by increased levels of nitrite, tumor necrosis factor-α and reactive oxygen species production, as well as up-regulation of inducible nitric oxide synthase expression. Under these conditions, cell proliferation data and proliferating cell nuclear antigen (PCNA) staining demonstrated a mitogenic effect of chemical hypoxia. Even though pre-treatment with Epo did not prevent nitrite production, inducible nitric oxide synthase protein expression or tumor necrosis factor-α secretion, it prevented the oxidative stress induced by CoCl2 as well as cell proliferation. Neuronal cells (SH-SY5Y) cultured in the presence of conditioned medium from activated EOC-2 cells or macrophages (RAW 264.7) developed significant apoptosis, an effect that was abolished by Epo via Epo/Epo receptor activation. The results show that even though Epo did not exert a direct anti-inflammatory effect on microglia activation, it did increase the resistance of neurons to subsequent damage from pro-inflammatory agents. In addition to its anti-apoptotic ability, the Epo antioxidant effect may have an indirect influence on neuronal survival by modulation of the pro-inflammatory environment.