The volume homeostasis of retinal glial cells is mediated by an autocrine purinergic mechanism of ion channel opening which is activated in response to a decrease in the extracellular osmolarity. Here, I show that erythropoietin (EPO) prevents the osmotic swelling of glial somata in retinal slices from control and diabetic rats, with a half-maximal effect at approximately 0.01 nM. The downstream signaling evoked by EPO includes a release of vascular endothelial growth factor from the cells which was blocked by Janus kinase and extracellular signal-regulated kinases (ERK)1/2 inhibitors. Transactivation of kinase insert domain-containing receptor/fms-like tyrosine kinase 1 (KDR/flk-1) evokes a calcium-dependent, exocytotic release of glutamate, followed by activation of group I/II metabotropic glutamate receptors which results in calcium-independent release of ATP and adenosine from the cells. The final step in this cascade is the activation of adenosine A(1) receptors which results in protein kinase A- and phosphoinositide 3-kinase-mediated opening of potassium and chloride channels. EPO receptor protein was immunohistochemically localized to the inner retina and photoreceptor inner segments. In isolated glial cells, EPO receptor protein is selectively localized to fibers which traverse the inner nuclear layer in situ. Inhibition of glial swelling might contribute to the neuroprotective action of EPO in the retina under pathological conditions.