Nitrite anions comprise the largest vascular storage pool of nitric oxide (NO), provided that physiological mechanisms exist to reduce nitrite to NO. We evaluated the vasodilator properties and mechanisms for bioactivation of nitrite in the human forearm. Nitrite infusions of 36 and 0.36 μmol/min into the forearm brachial artery resulted in supra- and near-physiologic intravascular nitrite concentrations, respectively, and increased forearm blood flow before and during exercise, with or without NO synthase inhibition. Nitrite infusions were associated with rapid formation of erythrocyte iron-nitrosylated hemoglobin and, to a lesser extent, S-nitroso-hemoglobin. NO-modified hemoglobin formation was inversely proportional to oxyhemoglobin saturation. Vasodilation of rat aortic rings and formation of both NO gas and NO-modified hemoglobin resulted from the nitrite reductase activity of deoxyhemoglobin and deoxygenated erythrocytes. This finding links tissue hypoxia, hemoglobin allostery and nitrite bioactivation. These results suggest that nitrite represents a major bioavailable pool of NO, and describe a new physiological function for hemoglobin as a nitrite reductase, potentially contributing to hypoxic vasodilation.