The feeder layer and the presence of specific growth factors are thought to induce the differentiation of embryonic stem cells (ESCs) in culture. The aim of this study was to evaluate the effect of erythropoietin (EPO) on the differentiation of ESCs into erythroid colonies in simple and co-culture systems. Embryoid bodies were dissociated and replated in semisolid medium in simple culture or in a co-culture system with bone-marrow stromal cells (BMSCs), both in the presence or absence of EPO. Colony assays, benzidine staining, and ultrastructural studies were carried out until day 10 of culture. Expression of the ε globin, βH1 globin, runt-related transcription factor 1 (RUNX1), βmajor globin, and erythropoietin receptor (EPOR) genes was evaluated using semi-quantitative RT-PCR. A comparison with the corresponding controls showed that colony size increased in both systems (P ≤≤ 0.05). The number of benzidine-positive colonies in the co-culture system with EPO (86.6 ± 17.86) was significantly different compared to the simple culture system with EPO (43.6 ± 4.77; P ≤≤ 0.05). The hemoglobin content of the differentiated cells was visualized in micrographs. Analysis of gene expression showed that all genes except βmajor globin were expressed in the simple culture system, whereas in the co-culture system all genes were expressed. These results confirmed that the presence of EPO in a BMSC co-culture system with ESCs improves the differentiation of ESCs to erythroid colonies. Moreover, evidence of primitive and definitive erythropoiesis was observed in this co-culture system. Am. J. Hematol., 2008. © 2007 Wiley-Liss, Inc.