Preterm infants suffer central nervous system (CNS) injury from hypoxia-ischemia and inflammation - termed encephalopathy of prematurity. Mature CNS injury activates caspase and calpain proteases. Erythropoietin (EPO) limits apoptosis mediated by activated caspases, but its role in modulating calpain activation has not yet been investigated extensively following injury to the developing CNS. We hypothesized that excess calpain activation degrades developmentally regulated molecules essential for CNS circuit formation, myelination and axon integrity, including neuronal potassium-chloride co-transporter (KCC2), myelin basic protein (MBP) and phosphorylated neurofilament (pNF), respectively. Further, we predicted that post-injury EPO treatment could mitigate CNS calpain-mediated degradation. Using prenatal transient systemic hypoxia-ischemia (TSHI) in rats to mimic CNS injury from extreme preterm birth, and postnatal EPO treatment with a clinically relevant dosing regimen, we found sustained postnatal excess cortical calpain activation following prenatal TSHI, as shown by the cleavage of alpha II-spectrin (αII-spectrin) into 145-kDa αII-spectrin degradation products (αII-SDPs) and p35 into p25. Postnatal expression of the endogenous calpain inhibitor calpastatin was also reduced following prenatal TSHI. Calpain substrate expression following TSHI, including cortical KCC2, MBP and NF, was modulated by postnatal EPO treatment. Calpain activation was reflected in serum levels of αII-SDPs and KCC2 fragments, and notably, EPO treatment also modulated KCC2 fragment levels. Together, these data indicate that excess calpain activity contributes to the pathogenesis of encephalopathy of prematurity. Serum biomarkers of calpain activation may detect ongoing cerebral injury and responsiveness to EPO or similar neuroprotective strategies.