RBCs distribute oxygen to tissues, but, paradoxically, blood transfusion does not always improve oxygen delivery and is associated with ischemic events. We hypothesized that storage of blood would result in loss of NO bioactivity, impairing RBC vasodilation and thus compromising blood flow, and that repleting NO bioactivity would restore RBC function. We report that S-nitrosohemoglobin (SNO-Hb) concentrations declined rapidly after storage of fresh venous blood and that hypoxic vasodilation by banked RBCs correlated strongly with the amounts of SNO-Hb (r² = 0.90; P < 0.0005). Renitrosylation of banked blood during storage increased the SNO-Hb content and restored its vasodilatory activity. In addition, canine coronary blood flow was greater during infusion of renitrosylated RBCs than during infusion of S-nitrosothiol-depleted RBCs, and this difference in coronary flow was accentuated by hypoxemia (P < 0.001). Our findings indicate that NO bioactivity is depleted in banked blood, impairing the vasodilatory response to hypoxia, and they suggest that SNO-Hb repletion may improve transfusion efficacy.