Objectives. This study evaluated the prevalence and severity of anemia in patients with congestive heart failure (CHF) and the effect of its correction on cardiac and renal function and hospitalization. Background. The prevalence and significance of mild anemia in patients with CHF is uncertain, and the role of erythropoietin with intravenous iron supplementation in treating this anemia is unknown. Methods. In a retrospective study, the records of the 142 patients in our CHF clinic were reviewed to find the prevalence and severity of anemia (hemoglobin [Hb] <12 g). In an intervention study, 26 of these patients, despite maximally tolerated therapy of CHF for at least six months, still had had severe CHF and were also anemic. They were treated with subcutaneous erythropoietin and intravenous iron sufficient to increase the Hb to 12 g%. The doses of the CHF medications, except for diuretics, were not changed during the intervention period. Results. The prevalence of anemia in the 142 patients increased with the severity of CHF, reaching 79.1% in those with New York Heart Association class IV. In the intervention study, the anemia of the 26 patients was treated for a mean of 7.2 ± 5.5 months. The mean Hb level and mean left ventricular ejection fraction increased significantly. The mean number of hospitalizations fell by 91.9% compared with a similar period before the study. The New York Heart Association class fell significantly, as did the doses of oral and intravenous furosemide. The rate of fall of the glomerular filtration rate slowed with the treatment. Conclusions. Anemia is very common in CHF and its successful treatment is associated with a significant improvement in cardiac function, functional class, renal function and in a marked fall in the need for diuretics and hospitalization.