Aim Fibroblast‐like renal erythropoietin (Epo) producing (REP) cells of the corticomedullary border region “sense” a decrease in blood oxygen content following anaemia or hypoxaemia. Burst‐like transcription of Epo during tissue hypoxia is transient and is lost during fibrotic tissue remodelling, as observed in chronic kidney disease. The reason for this loss of Epo expression is under debate. Therefore, we tested the hypothesis that REP cell migration, loss and/or differentiation may cause Epo inhibition. Methods Using a reporter mouse that allows permanent labelling of active REP cells at any given time point, we analysed the spatiotemporal fate of REP cells following their initial hypoxic recruitment in models of hypoxaemia and renal tissue remodelling. Results In long‐term tracing experiments, tagged REP reporter cells neither died, proliferated, migrated nor transdifferentiated into myofibroblasts. Approximately 60% of tagged cells re‐expressed Epo upon a second hypoxic stimulus. In an unilateral model of tissue remodelling, tagged cells proliferated and ceased to produce Epo before a detectable increase in myofibroblast markers. Treatment with a hypoxia‐inducible factor (HIF) stabilizing agent (FG‐4592/roxadustat) re‐induced Epo expression in the previously active REP cells of the damaged kidney to a similar extent as in the contralateral healthy kidney. Conclusions Rather than cell death or differentiation, these results suggest cell‐intrinsic transient inhibition of Epo transcription: following long‐term dormancy, REP cells can repeatedly be recruited by tissue hypoxia, and during myofibrotic tissue remodelling, dormant REP cells are efficiently rescued by a pharmaceutic HIF stabilizer, demonstrating persistent REP cell functionality even during phases of Epo suppression.