The kidneys fulfil several essential homeostatic functions for the body. One of them is the maintenance of sufficient oxygen supply to the organs. For this purpose, the kidneys control the formation of red blood cells by the production of the hormone erythropoietin. This control of red cell formation is not only relevant to prevent states of oxygen deficiency but also to prevent an unwanted increase of red cell numbers causing thromboembolic risks. The adequate production of erythropoietin requires a sensing of the arterial oxygen content and transduction to hormone production. This oxygen sensing is a two-step process which includes a translation of the arterial oxygen content to respective oxygen tension in the tubulointerstitium and a perception of the resulting local interstitial oxygen tension to translate them into specific cellular responses such as the production of erythropoietin. This contribution will describe these steps of oxygen sensing for the healthy kidney and for the changes occurring during states of chronic renal disease, which are commonly associated with anemia. In this context a special focus will also be set on intrarenal hypoxia and oxygen sensing in the diabetic kidney including the treatment with tubular glucose transport (SGLT-2) inhibitors which might influence the oxygen sensing in the kidney. Finally, we will consider the effects of prolylhydroxylase inhibitors (PHD-I), which fundamentally interfere with the cellular oxygen sensing and which are meanwhile treatment options in renal anemia.