Acute isovolemic hemodilution is used increasingly to avoid the potentially serious side effects of homologous blood transfusions. Cardiovascular physiology during hemodilution is characterized by a marked increase in cardiac output and organ blood flow to compensate for the decrease in arterial oxygen-carrying capacity. During advanced hemodilution an increased oxygen extraction is also observed, such that oxygen consumption generally is maintained even during advanced hemodilution. The increase in cardiac output is related mainly to a decrease in blood viscosity and an enhanced sympathetic tone resulting in stimulation of the heart. The magnitude and the mechanisms involved in the increase depend upon species, state of awareness (awake versus anesthetized), type of anesthesia, type of exchange solution, and condition of the heart prior to hemodilution. Recent laboratory findings, as well as clinical practice in cardiac surgery, suggest that moderate hemodilution to hematocrit values of approximately 25% is well tolerated in single vessel coronary artery disease which should thus not be regarded as an absolute contraindication for moderate hemodilution. An integral concept to minimize homologous blood transfusions consists of preoperative autologous blood donation, preoperative isovolemic hemodilution, meticulous (asanguineous) surgical technique, and acceptance of minimum hemoglobin levels during the entire hospitalization. The incidence of homologous blood transfusions will be reduced using acute isovolemic hemodilution. This incidence will be further reduced once hemoglobin solutions become clinically available for specific indications. At present, research activities are concentrated on defining the critical level of hemodilution in various pathologic conditions and to investigate pharmacology and physiology of the new hemoglobin solutions. Finally, several chemically modified hemoglobin-based oxygen-carrying solutions devoid of renal toxicity will be available in the future. The cardiovascular physiology and pharmacology of these hemoglobin solutions have been studied. Cardiac output is generally constant and oxygen extraction is increased to maintain oxygen consumption during hemodilution with hemoglobin solutions. In most studies, some vasoconstriction was observed also, which might result from interaction of the hemoglobin molecule with the EDRF/NO system. However, with enhanced purification, chemical modification or microencapsulation of the hemoglobin molecule, vasoconstriction can be limited.