Highly purified human erythroid colony-forming cells (ECFC), which consist predominately of colony-forming units-erythroid (CFU-F), were prepared from human blood and used to study the binding and processing of erythropoietin (Ep). When radioiodinated human recombinant Ep (125I-rEp) was incubated with these cells, binding was specific and saturable. Specific binding was directly proportional to cell concentration and did not occur with other human cells. Saturation of specific binding at 3°C occurred at 1 nM (3.9/U/ml), and Scatchard analysis revealed two classes of binding sites on the cell surface. Of a total of 1,050 binding sites per ECFC, one-fifth had a Kd of 0.10 nM, while the remainder had a Kd of 0.57 nM. Specific binding was twofold greater at 37°C than at 3°C, and removal of surface-bound Ep with acid indicated that 125I-rEp was internalized into the cells after incubation at 37°C. Further incubation at this temperature showed a decline of cellular radioactivity, with a release of small molecular weight degradation fragments into the medium. These studies demonstrate two classes of receptors for Ep on normal human ECFC. Internalization and degradation of EP occur, and the biologic effect of the hormone is produced by a small number of Ep molecules, as demonstrated in murine erythroid progenitor cells.