Upon erythropoietin (Epo) engagement, Epo-receptor (R) homodimerizes to activate JAK2 and Lyn, which phosphorylate STAT5. Although recent investigations have identified key negative regulators of Epo-R signaling, little is known about the role of membrane localization in controlling receptor signal fidelity. Here we show a critical role for membrane raft (MR) microdomains in creation of discrete signaling platforms essential for Epo-R signaling. Treatment of UT7 cells with Epo induced MR assembly and coalescence. Confocal microscopy showed that raft aggregates significantly increased after Epo stimulation (mean, 4.3±1.4(SE) vs. 25.6±3.2 aggregates/cell; p≤0.001), accompanied by a >3-fold increase in cluster size (p≤0.001). Raft fraction immunoblotting showed Epo-R translocation to MR after Epo stimulation and was confirmed by fluorescence microscopy in Epo stimulated UT7 cells and primary erythroid bursts. Receptor recruitment into MR was accompanied by incorporation of JAK2, Lyn, and STAT5 and their activated forms. Raft disruption by cholesterol depletion extinguished Epo induced Jak2, STAT5, Akt and MAPK phosphorylation in UT7 cells and erythroid progenitors. Furthermore, inhibition of the Rho GTPases Rac1 or RhoA blocked receptor recruitment into raft fractions, indicating a role for these GTPases in receptor trafficking. These data establish a critical role for MR in recruitment and assembly of Epo-R and signal intermediates into discrete membrane signaling units.