Erbium-165 (¹⁶⁵Er) is an Auger electron emitter with 7.2 electrons per decay and very few other emissions, making it an interesting candidate for Auger electron therapy. We present here a procedure for producing ¹⁶⁵Er by the ^natHo(p,n)¹⁶⁵Er nuclear reaction on a 16.5 MeV medical cyclotron. The target was prepared by pressing a Ho₂O₃:Al 1:1 (w/w) powder mixture on a Ag disc with a cylindrical depression in the center. With a 0.1 mm Nb foil in front, degrading the energy to 15 MeV, and water cooling at the back of the Ag disc, the target could withstand irradiation at currents up to 45 µA without showing any signs of damage. The beam tolerance of the target was also estimated by calculating the temperature and heat dissipation in the target via the numerical solution of the heat transport equations. For a 180 mg target, the production yield was 12.3 ± 1.9 MBq/µAh. The separation of two neighboring lanthanides is challenging, which led us to study the distribution coefficients for Er and Ho on commercially available LN2 resin for both HNO₃ and HCl eluents. Based on these values, we propose a purification procedure involving two successive LN2 columns for separating the ¹⁶⁵Er from Ho and Al, followed by a small TK221 column to concentrate the final eluate. No radionuclidic impurities were detected, and the chemical impurities found in the final formulation were traces of Ho, Er, Ca, Pb, and Fe. For three different chelators (DOTA, DTPA, and CHX-A″-DTPA), the effective molar activity of the final formulation was measured. The stability of the three complexes formed was also assessed upon incubation in mouse serum for 28 h.