Transfusion of hemoglobin-based blood substitutes, designed for their plasma expansion and oxygen transport capabilities, has resulted in some major problems, such as organ dysfunction, during clinical trials. Experimental evidence demonstrates that these hemoglobins damage tissue by producing highly reactive oxygen species. Although cell-free hemoglobin may present a low risk to people with normal redox status, patients who are sick and have a poor antioxidant status may be at risk. Oxidative damage is particularly dangerous in the microcirculation because excess leakage of plasma components into the interstitium will disturb the fluid balance between blood and tissue and alter the kinetics of delivery of intravascularly injected drugs, and endogenous enzymes and hormones, to various tissues. In this review, the redox chemistry of hemoglobin-based blood substitutes is briefly described, and their effects on cultured endothelial cells, and on the exchange properties of the microvasculature, are discussed. Taking into account the possible mechanisms by which oxidative damage can occur, various methods to reduce the deleterious effects of blood substitutes in vivo are evaluated. Finally, several possible cell signaling pathways that are triggered in endothelial cells, in response to modified hemoglobins, are considered in terms of protecting microvascular function.