A classic response to systemic hypoxia is the increased production of red blood cells due to hypoxia-inducible factor (HIF)-mediated induction of erythropoietin (EPO). EPO is a glycoprotein hormone that is essential for normal erythropoiesis and is predominantly synthesized by peritubular renal interstitial fibroblast-like cells, which express cellular markers characteristic of neuronal cells and pericytes. To investigate whether the ability to synthesize EPO is a general functional feature of pericytes, we used conditional gene targeting to examine the von Hippel-Lindau/prolyl-4-hydroxylase domain (PHD)/HIF axis in cell-expressing neural glial antigen 2, a known molecular marker of pericytes in multiple organs. We found that pericytes in the brain synthesized EPO in mice with genetic HIF activation and were capable of responding to systemic hypoxia with the induction of Epo. Using high-resolution multiplex in situ hybridization, we determined that brain pericytes represent an important cellular source of Epo in the hypoxic brain (up to 70% of all Epo-expressing cells). We furthermore determined that Epo transcription in brain pericytes was HIF-2 dependent and cocontrolled by PHD2 and PHD3, oxygen- and 2-oxoglutarate-dependent prolyl-4-hydroxylases that regulate HIF activity. In summary, our studies provide experimental evidence that pericytes in the brain have the ability to function as oxygen sensors and respond to hypoxia with EPO synthesis. Our findings furthermore suggest that the ability to synthesize EPO may represent a functional feature of pericytes in the brain and kidney.