Objective measures to assess the need for transfusion in chronic anemia are lacking. Near-infrared spectroscopy may be used, but there is wide variability. Assessment of muscle oxygen saturation (SmO2 ) during exercise could be used to measure the impact of anemia on performance of everyday activities. Hematology patients and controls were recruited to undertake a 6-minute walk test (6MWT) and a 20-second isometric handgrip exercise. Muscle oxygen saturation in the exercising muscles was measured before and during exercise. Changes in saturation during exercise were described. Correlations between identified variables, hemoglobin concentration, and 6MWT distance were undertaken. The effect of transfusion was assessed on a transfused subset. There were 95 sets of exercises conducted in 74 participants. Baseline SmO2 correlated with hemoglobin concentration and negatively with 6MWT distance. Paradoxically, a higher hemoglobin was associated with a greater SmO2 fall during the 6MWT, likely due to greater consumption from improved walk distances. The fall in SmO2 was independent of hemoglobin during isometric contraction, although levels were lower during contraction due to the lower starting SmO2 . There was a longer time to peak SmO2 during recovery following isometric exercise in anemia. There were 17 paired tests following a change in hemoglobin, with SmO2 not predicting improvement in those who had improved exercise capacity. While baseline SmO2 correlated with hemoglobin concentration, the correlation was not strong enough to predict transfusion requirements. Recovery after isometric forearm contraction correlated with hemoglobin and warrants further investigation.