A wide variety of hemoglobin-based oxygen carriers (HBOCs) have been designed for use as red blood cell (RBC) substitutes in transfusion medicine, ex vivo organ perfusion, oxygen delivery to hypoxic tissues, and a myriad of other applications. However, hemoglobin (Hb) derived from annelids (erythrocruorins [Ecs]) comprise a natural class of HBOC, since they are larger in size (30 nm in diameter) and contain more heme groups per molecule (144 heme groups) compared to human Hb (hHb; 5 nm in diameter and 4 heme groups). The larger size of Ec compared to hHb reduces tissue extravasation from the vascular space, thus, reducing vasoconstriction, systemic hypertension, and tissue oxidative injury when used as an RBC substitute. In addition, prior research has shown that Ecs possess slower auto-oxidation rates than hHb at physiological temperature, thus, making them attractive candidates for use as RBC substitutes. Unfortunately, it was also observed that Ecs have a much lower circulatory half-life in vivo compared to other HBOCs. Hence, conjugating polyethylene glycol (PEG) to the surface of Ec was proposed as a simple strategy to increase Ec circulatory half-life. Therefore, in order to inform future in vivo studies with PEGylated Ec, we decided to investigate the structural stability and biophysical properties of variable PEG surface coverage on Ec compared to native Ec. We observed an increase in PEG-Ec diameter and molecular weight (MW) and changes to the quaternary structure, secondary structure, and surface hydrophobicity after PEGylation. There was also an increase in oxygen binding affinity, reduction in oxygen offloading rate, and increase in auto-oxidation rate for increasing PEGylation ratios. Weak dissociation of Ec was also observed after dense PEGylation caused by steric repulsion of the conjugated PEG chains. Hence, we determined an optimum Ec PEGylation ratio that resulted in a substantial size and MW increase along with preservation of oxygen binding properties. In future studies, these materials will be tested in animal models to evaluate pharmacodynamics, pharmacokinetics, tissue oxygenation, microcirculatory responses, and overall safety.