Nitric oxide (NO) is a key regulator of vascular tone. Endothelial nitric oxide synthase (eNOS) is responsible for NO generation under normoxic conditions. Under hypoxia however, eNOS is inactive and red blood cells (RBC) provide an alternative NO generation pathway from nitrite to regulate hypoxic vasodilation. While nitrite reductase activity of hemoglobin is well acknowledged, little is known about generation of NO by intact RBC with physiological hemoglobin concentrations. We aimed to develop and apply a new approach to provide insights in the ability of RBC to convert nitrite into NO under hypoxic conditions. We established a novel experimental setup to evaluate nitrite uptake and the release of NO from RBC into the gas-phase under different conditions. NO measurements were similar to well-established clinical measurements of exhaled NO. Nitrite uptake was rapid, and after an initial lag phase NO release from RBC was constant in time under hypoxic conditions. The presence of oxygen greatly reduced NO release, whereas inhibition of eNOS and xanthine oxidoreductase (XOR) did not affect NO release. A decreased pH increased NO release under hypoxic conditions. Hypothermia lowered NO release, while hyperthermia increased NO release. Whereas fetal hemoglobin did not alter NO release compared to adult hemoglobin, sickle RBC showed an increased ability to release NO. Under all conditions nitrite uptake by RBC was similar. This study shows that nitrite uptake into RBC is rapid and release of NO into the gas-phase continues for prolonged periods of time under hypoxic conditions. Changes in the RBC environment such as pH, temperature or hemoglobin type, affect NO release.