Background: Despite advances in clinical care, the incidence of bronchopulmonary dysplasia (BPD) remains high in premature infants. Erythropoietin (EPO) is used for the treatment of anemia of prematurity (AOP) to decrease blood transfusion needs. EPO has been shown to mobilize circulating endothelial progenitor cells and to enhance lung repair in animal models. Objective: To determine whether EPO treatment for AOP was associated with a reduced incidence of BPD in premature infants. Methods: This retrospective study was performed on all live-born neonates with birth weights from 500 to 1,500 g and gestational age (GA) from 22 to 32 weeks admitted from 1994 to 2002. Infants who received EPO and those who did not receive EPO were compared for incidence of BPD and other morbidities. Results: Of478 patients, 297 received EPO before 36 weeks’ postmenstrual age (group 1) and 181 did not receive EPO (group 2). Group 1 was of similar birth weight but lower GA than group 2. The incidence of BPD was lower in group 1 than group 2 (26 vs. 36%, p = 0.03); after adjusting for significant risk factors, the adjusted odds ratio for BPD was 0.50 (95% CI 0.32, 0.79), p = 0.0028. The BPD rate was much lower when EPO was initiated before 4 weeks of age (16%) as compared to later initiation (44%). Conclusions: This study shows an association between EPO treatment and reduced incidence of BPD in preterm infants, particularly when EPO treatment was initiated within the first 4 weeks of life.