The extracellular domain of the human erythropoietin receptor (EPO binding protein (EBP)) has been expressed and overproduced in Escherichia coli. Regardless of the presence ofpelB or ompT signal sequences the recombinant protein produced in this fashion appears, as with many other recombinant eukaryotic proteins produced in E. coli as an insoluble product in laboratory scale fermentations. The induction product of the pelB protein expression system appears as two protein forms with slightly different molecular weights. Based on N-terminal sequence analysis of recovered protein, these forms represent two variants, one with the signal sequence properly processed to yield the expected "native" amino terminus and another which retains the signal sequence. Both forms appear as insoluble fermentation products. Control of oxygen levels and pH during high density fermentation allows the production of only the protein variant with the native amino terminus. Methods reported here permit the efficient recovery of purified EBP which quantitatively binds EPO in solution as determined by high performance size exclusion chromatography. A long-lived refolding intermediate was observed which penultimately collapses into an active conformation. The active purified protein competes with membrane associated EPO receptor for binding [125I]EPO and neutralizes EPO-dependent stimulation in a cell based proliferation assay. Further, the radioligand equilibrium binding constant for this interaction has been determined by immobilizing EBP on agarose gel via a free cysteine. The production of EBP by these methods should facilitate the structural determination of the protein by NMR or crystallography and may serve as a guide for the refolding of other hematopoietic receptors.