Accumulating evidence implicates innate immune activation in the pathobiology of myelodysplastic syndromes. A key myeloid related inflammatory protein, S100A9, serves as a Toll-like receptor ligand regulating TNFα and IL-1β production. The role of MDS-related inflammatory proteins in endogenous Epo regulation and response to erythroid stimulating agents or lenalidomide has not been investigated. The HepG2 hepatoma cell line was used to investigate in vitro Epo elaboration. Serum collected from 311 MDS patients were investigated (125 prior to erythroid stimulating agents and 186 prior to lenalidomide). Serum concentrations of S100A9, S100A8, TNFα, IL1β and Epo were analyzed by ELISA. Using Epo-producing HepG2 cells, we show that S100A9, TNFα and IL-1β suppress transcription and cellular elaboration of Epo. Pre-incubation with lenalidomide significantly diminished suppression of Epo production by S100A9 or TNFα. Moreover, in myelodysplastic syndromes peripheral blood mononuclear cells, lenalidomide significantly reduced steady state S100A9 generation (p=0.01) and LPS-induced TNFα elaboration (p=0.002). ELISA analysis of serum from 316 non-del(5q) myelodysplastic syndromes patients demonstrated a significant inverse correlation between TNFα and Epo concentration (p=0.006), and between S100A9 and Epo (p=0.01). Moreover, baseline serum TNFα concentration was significantly higher in ESA responders (p=0.03), whereas lenalidomide responders had significantly lower TNFα and higher S100A9 serum concentrations (p=0.03). These findings suggest that S100A9 and its NF-kB transcriptional target, TNFα, directly suppress Epo elaboration in myelodysplastic syndromes. These cytokines may serve as rational biomarkers for response to lenalidomide and erythroid stimulating agent treatments. Therapeutic strategies that either neutralize or suppress S100A9 may improve erythropoiesis in myelodysplastic syndromes patients.