The reaction rate between nitric oxide and intraerythrocytic hemoglobin plays a major role in nitric oxide bioavailability and modulates homeostatic vascular function. It has previously been demonstrated that the encapsulation of hemoglobin in red blood cells restricts its ability to scavenge nitric oxide. This effect has been attributed to either factors intrinsic to the red blood cell such as a physical membrane barrier or factors external to the red blood cell such as the formation of an unstirred layer around the cell. We have performed measurements of the uptake rate of nitric oxide by red blood cells under oxygenated and deoxygenated conditions at different hematocrit percentages. Our studies include stopped-flow measurements where both the unstirred layer and physical barrier potentially participate, as well as competition experiments where the potential contribution of the unstirred layer is limited. We find that deoxygenated erythrocytes scavenge nitric oxide faster than oxygenated cells and that the rate of nitric oxide scavenging for oxygenated red blood cells increases as the hematocrit is raised from 15% to 50%. Our results 1) confirm the critical biological phenomenon that hemoglobin compartmentalization within the erythrocyte reduces reaction rates with nitric oxide, 2) show that extra-erythocytic diffusional barriers mediate most of this effect, and 3) provide novel evidence that an oxygen-dependent intrinsic property of the red blood cell contributes to this barrier activity, albeit to a lesser extent. These observations may have important physiological implications within the microvasculature and for pathophysiological disruption of nitric oxide homeostasis in diseases.