New red blood cells are formed in the bone marrow, a fluid found in the centre of the bone. Through the process of erythropoiesis RBCs are produced in the hematopoietic tissues like bone marrow in humans. When oxygen level decreases in circulation, kidneys detected the low level and in response to it secretes the hormone erythropoietin. This hormone stimulates the proliferation and differentiation of red cells precursors and hence the erythropoiesis.