A critical element in the ability of endothelial NO to function in the vasculature is preventing its reaction with erythrocytic Hb (haemoglobin). Emerging concepts suggest that the biophysical and rheological properties of the red blood cell are important in meeting this criterion. It has been recognized for some time that cell-free Hb may react with endothelial NO and that this may underlie the problems with Hb-based blood substitutes. More recent data extend these concepts to haemolytic diseases, including sickle cell disease, and have also identified novel therapeutic strategies to prevent interactions of cell-free Hb with NO. In this overview we have hypothesized that production of high concentrations of NO can overcome the diffusional barriers presented by the red cell and result in formation of S-nitrosohaemoglobin. By doing so, it is hypothesized that Hb may mediate the vasodilatory potential of NO and contribute to the hypotensive responses observed in acute inflammatory diseases, including sepsis. © 2004 The Biochemical Society.