We previously found limited tolerance to acute reduction in cardiac output in lambs at the nadir of their physiological anemia [Am. J. Physiol. 253 (Heart Cir. Physiol. 12): H100-H106, 1987]. To determine the effect of hemoglobin concentration [Hb] on critical cardiac output, critical systemic O2 transport, and peripheral O2 extraction, we performed 31 experiments in 12 one-mo-old lambs at four [Hb] (means +/- SD in g/dl): 7.4 +/- 0.6, 10.5 +/- 0.5, 14.5 +/- 0.5, and 16.5 +/- 0.6. Desired [Hb] was obtained by exchange transfusion with packed red cells or plasma. Cardiac output was reduced by inflation of a balloon-tipped catheter in the right atrium, and critical levels were defined at the point where O2 consumption decreased and/or arterial blood lactate concentration increased in response. With lower [Hb], cardiac output was unchanged, systemic O2 transport was reduced, and fractional O2 extraction was increased, keeping O2 consumption constant at base line. As [Hb] was reduced, critical cardiac output was significantly higher, whereas critical systemic O2 transport was independent of [Hb], as were fractional O2 extraction and mixed venous PO2 at the critical point. Thus peripheral O2 extraction was not affected by changes in [Hb] during progressive decreases in cardiac output. We conclude that 4-wk-old lambs have decreased tolerance to reductions in cardiac output and systemic O2 transport because their relative anemia provides them with a base-line cardiac output and systemic O2 transport close to the critical level.