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.