Red cell substitutes are solutions that can potentially be used in emergencies or during surgery when rapid expansion of the blood volume with an oxygen carrier is needed. The three main types of products in development are based on cell-free hemoglobin, perfluorocarbon emulsions, or liposome-encapsulated hemoglobin. None is currently approved for clinical use, but several are in advanced clinical trials. Outside the red blood cell, hemoglobin is subject to degradation and heme loss. It readily diffuses in the plasma space and effectively scavenges nitric oxide. These properties must be understood and controlled if hemoglobin-based products are to fulfill their promise. The development of red cell substitutes affords us a deeper insight into how oxygen is delivered to tissues in the microcirculation and how blood-flow distribution is regulated within and between organs. As red cell substitutes become available to clinicians and scientists, clinical applications are expected to expand.