We examined the effects of liposome-encapsulated hemoglobin, neo red cells (NRCs), on hemorrhagic shock in a canine model. The dogs were divided into the three groups according to treatment. In group 1, composed of six dogs, NRCs were substituted for blood without shock being induced; in group 2, composed of six dogs, NRCs were administered immediately after mild shock had been induced by exsanguination through the vein; and in group 3, composed of seven dogs, NRCs were administered after they had been left untreated for 30 min inducing severe shock. In group 2, administration of NRCs at a dose equivalent to the volume of exsanguinated blood improved the symptoms of shock; however, in group 3, a dose of NRCs 1.6-times the volume of exsanguinated blood was required. Peripheral vascular resistance (PVR) decreased after NRC administration in groups 1 and 2, but increased in group 3. On the other hand, the cardiac index (CI) increased in groups 1 and 2, and decreased in group 3. Concerning oxygen kinetics, there were no increases in the oxygen requirements or arteriovenous differences of the oxygen content per hemoglobin (AV/Hb) for NRCs in groups 1 and 2. Conversely, in group 3, the oxygen requirements increased and the NRCs compensated for the decrease in CI with an increase in AV/Hb by enhancing the oxygen transport efficiency to cope with the increased oxygen requirements.