A number of clinical studies have associated acute anemia with cerebral injury in perioperative patients. Evidence of such injury has been observed near the currently accepted transfusion threshold (hemoglobin [Hb] concentration, 7-8 g/dL), and well above the threshold for cerebral tissue hypoxia (Hb 3-4 g/dL). However, hypoxic and nonhypoxic mechanisms of anemia-induced cerebral injury have not been clearly elucidated. In addition, protective mechanisms which may minimize cerebral injury during acute anemia have not been well defined. Vasodilatory mechanisms, including nitric oxide (NO), may help to maintain cerebral oxygen delivery during anemia as all three NO synthase (NOS) isoforms (neuronal, endothelial, and inducible NOS) have been shown to be up-regulated in different experimental models of acute hemodilutional anemia. Recent experimental evidence has also demonstrated an increase in an important transcription factor, hypoxia inducible factor (HIF)-1alpha, in the cerebral cortex of anemic rodents at clinically relevant Hb concentrations (Hb 6-7 g/dL). This suggests that cerebral oxygen homeostasis may be in jeopardy during acute anemia. Under hypoxic conditions, cytoplasmic HIF-1alpha degradation is inhibited, thereby allowing it to accumulate, dimerize, and translocate into the nucleus to promote transcription of a number of hypoxic molecules. Many of these molecules, including erythropoietin, vascular endothelial growth factor, and inducible NOS have also been shown to be up-regulated in the anemic brain. In addition, HIF-1alpha transcription can be increased by nonhypoxic mediators including cytokines and vascular hormones. Furthermore, NOS-derived NO may also stabilize HIF-1alpha in the absence of tissue hypoxia. Thus, during anemia, HIF-1alpha has the potential to regulate cerebral cellular responses under both hypoxic and normoxic conditions. Experimental studies have demonstrated that HIF-1alpha may have either neuroprotective or neurotoxic capacity depending on the cell type in which it is up-regulated. In the current review, we characterize these cellular processes to promote a clearer understanding of anemia-induced cerebral injury and protection. Potential mechanisms of anemia-induced injury include cerebral emboli, tissue hypoxia, inflammation, reactive oxygen species generation, and excitotoxicity. Potential mechanisms of cerebral protection include NOS/NO-dependent optimization of cerebral oxygen delivery and cytoprotective mechanisms including HIF-1alpha, erythropoietin, and vascular endothelial growth factor. The overall balance of these activated cellular mechanisms may dictate whether or not their up-regulation leads to cytoprotection or cellular injury during anemia. A clearer understanding of these mechanisms may help us target therapies that will minimize anemia-induced cerebral injury in perioperative patients.