The aim of this study was to test the influence of hemoglobin, encapsulated in phospholipid vesicles as an oxygen carrier, given in the course of isovolemic hemodilution to improve oxygenation in critically ischemic hamster flap tissue. Capillary hemodynamics and macromolecular leakage were investigated with intravital microscopy and analyzed off-line with the CapImage software. Partial tissue oxygen tension was measured with fluorescence quenching electrodes. The occurrence of apoptosis was assessed with the TUNEL assay. Vesicles with (HbV) or without (V) encapsulated Hb were suspended in 6% hydroxyethyl starch (HES) used for the 33% blood exchange. In the ischemic tissue, hemodilution led to an increase in functional capillary density by 31% for HES (P < 0.01 vs. other groups), 66% for V-HES, and 62% for HbV-HES (all P < 0.01 vs. control). Capillary diameters behaved inversely proportional to capillary microhemodynamics. The 20% increase in macromolecular leakage found over time in control animals was completely abolished in the vesicles groups (P < 0.01) but not with HES. Oxygen tension was improved from 10.7 mmHg to 16.0 mmHg after HbV-HES (P < 0.01 vs. baseline and other groups). Compared to the other groups, apoptosis was significantly reduced after HbV-HES (P < 0.01). We conclude that the encapsulation of Hb was essential to attenuate hypoxia and subsequent cell death in the critically ischemic tissue. However, the effect was partly attributed to the rheological changes exerted by the vesicles.