Erythrocytes regulate vascular function through the modulation of oxygen delivery and the scavenging and generation of nitric oxide (NO). First, hemoglobin inside the red blood cell binds oxygen in the lungs and delivers it to tissues throughout the body in an allosterically regulated process, modulated by oxygen, carbon dioxide and proton concentrations. The vasculature responds to low oxygen tensions through vasodilation, further recruiting blood flow and oxygen carrying erythrocytes. Research has shown multiple mechanisms are at play in this classical hypoxic vasodilatory response, with a potential role of red cell derived vasodilatory molecules, such as nitrite derived nitric oxide and red blood cell ATP, considered in the last 20 years. According to these hypotheses, red blood cells release vasodilatory molecules under low oxygen pressures. Candidate molecules released by erythrocytes and responsible for hypoxic vasodilation are nitric oxide, adenosine triphosphate and S-nitrosothiols. Our research group has characterized the biochemistry and physiological effects of the electron and proton transfer reactions from hemoglobin and other ferrous heme globins with nitrite to form NO. In addition to NO generation from nitrite during deoxygenation, hemoglobin has a high affinity for NO. Scavenging of NO by hemoglobin can cause vasoconstriction, which is greatly enhanced by cell free hemoglobin outside of the red cell. Therefore, compartmentalization of hemoglobin inside red blood cells and localization of red blood cells in the blood stream are important for healthy vascular function. Conditions where erythrocyte lysis leads to cell free hemoglobin or where erythrocytes adhere to the endothelium can result in hypertension and vaso constriction. These studies support a model where hemoglobin serves as an oxido-reductase, inhibiting NO and promoting higher vessel tone when oxygenated and reducing nitrite to form NO and vasodilate when deoxygenated.