Erythropoietin, the major hormone controlling red-cell production, is regulated in part through oxygen-dependent changes in the rate of transcription of its gene. Using transient transfection in HepG2 cells, we have defined a DNA sequence, located 120 base pairs 3' to the poly(A)-addition site of the mouse erythropoietin gene, that confers oxygen-regulated expression on a variety of heterologous promoters. The sequence has the typical features of a eukaryotic enhancer. Approximately 70 base pairs are necessary for full activity, but reiteration restores activity to shorter inactive sequences. This enhancer operates in HepG2 and Hep3B cells, but not in Chinese hamster ovary cells or mouse erythroleukemia cells, and responds to cobalt but not to cyanide or 2-deoxyglucose, thus reflecting the physiological control of erythropoietin production accurately.