We found that 2-amino-5-methylphenol was converted to the dihydrophenoxazinone with a reddish brown color by purified human hemoglobin, lysates of human erythrocytes, and human erythrocytes. The reddish brown compound was identified as 2-amino-4,4 alpha-dihydro-4 alpha,7-dimethyl-3H-phenoxazin-3-one by the measurement of NMR spectra, IR spectra, EI mass spectra, and absorption spectra. The changes in this phenoxazinone were studied under various conditions after mixing 2-amino-5-methylphenol with purified oxy- or methemoglobin, or with human erythrocytes. The production of 2-amino-4,4 alpha-dihydro-4 alpha,7-dimethyl-3H-phenoxazine-3-one from 2-amino-5-methylphenol was found to be tightly coupled with the oxidation of ferrous hemoglobin and reduction of ferric hemoglobin under aerobic conditions. By studying the production rates of the dihydrophenoxazinone and the oxido-reduction rates of ferrous and ferric hemoglobins during the reactions of ferrous or ferric hemoglobin with 2-amino-5-methylphenol under aerobic and anaerobic conditions, the reaction mechanism was extensively proposed.