An in vitro marrow culture assay designed to measure erythropoietic capability was used to ascertain the presence of an inhibitor in the sera of patients with congenital hypoplastic anemia (CHA). Marrow cells from nine anemic CHA patients responded to the stimulatory effect of exogenous erythropoietin (EPO) by an increase in heme synthesis in the presence of normal serum. The effect on heme synthesis was less than that observed with normal marrow cells. CHA serum inhibited heme synthesis by both normal and CHA marrow cells. It is concluded that an in-inhibitor of erythropoiesis is present in serum from CHA patients. This inhibitor most likely blocks the EPO-sensitive stem cell receptor sites, causing decreased response to the hormone.