We clarified the effect of exchange transfusion with liposome-encapsulated hemoglobin (neo red cells, NRCs) with low O₂ affinity (P₅₀O₂ = 50 mm Hg) on O₂ metabolism. Rabbits were randomly assigned to receive serial exchange transfusions with NRC (NRC group, n = 5), shed blood diluted 1:1 with saline (red blood cell (RBC) group, n = 5), or saline alone (plasma group, n = 4) under hemodynamic monitoring. Cardiac tamponade was then induced and successively reversed to determine relationships between O₂ consumption (VO₂) and O₂ delivery (DO₂) using the dual-line method. Mean values of Hb concentration after exchange transfusion were 5.7 (NRC), 6.0 (RBC), and 1.5 (plasma) g/dL. The plasma group could not even survive the initial exchange hemodilution due to a critical decrease in DO₂. The NRC, but not the RBC group, developed progressive metabolic acidosis and lactatemia, as well as increases in PaCO₂ and decreases in tissue PO₂ in skeletal muscle after exchange transfusion. Nonetheless, systemic O₂ uptake indices obtained from an analysis of the VO₂/DO₂ relationship in the NRC and RBC groups were comparable. These findings suggested that systemic O₂ uptake was maintained in rabbits after exchange transfusion with NRC, although progressive tissue hypoxia with systemic acidosis is indicative of inadequate peripheral circulation and insufficient aerobic metabolism during extended hemodilution in which 86% of the circulating blood is replaced.