Erythropoietin (EPO), a 34 kDa glycoprotein, is produced predominantly by peritubular interstitial cells (PIC) in the renal cortex, and is physiologically released when ambient oxygen pressure falls. However, the exact nature of EPO-producing cells in the kidney is not well understood. We discovered that brief administration of a low molecular weight synthetic peptide, poly-D-glutamic acid (PDG), induced prompt and robust expansion of EPO-producing PIC in rat kidney, without evidence of tubular cell necrosis/apoptosis or fibrotic reaction. Proliferating PIC in PDG-treated rats were non-inflammatory, -smooth muscle actin-negative, and specifically expressed CD73 (ecto-5'-nucleotidase), EPO mRNA and protein. Increased numbers of EPO-positive PIC persisted even after the cessation of PDG treatment. No erythropoietic effects of EPO were detected, potentially suggesting maintained physiological control of EPO secretion in this normoxic model. We showed previously that PDG is readily filtered and is rapidly taken up and stored in lysosomes of proximal tubular cells (PTC), resulting in an apparently non-noxious lysosomal storage condition by virtue of its non-hydrolyzable nature (Kishore et al, 1996a, 1996b, Lab Invest 74:1013). Based on these findings we suggest that unknown signaling molecules, produced by PTC in response to lysosomal PDG storage, appear to specifically stimulate the proliferation of EPO-producing PIC. We conclude that this model is uniquely suited to investigate the biology of EPO production by PIC, and may thus facilitate the development of novel and more economical therapies of anemias and other EPO-responsive conditions.