We performed this study to elucidate whether a newly developed liposome-encapsulated hemoglobin, TRM-645 (TRM), can prevent cerebral dysfunction resulting from acute ischemic stroke when used as an oxygen carrier. Hippocampal long-term potentiation (LTP) in the perforant path-dentate gyrus synapses and anxiety-related behaviors in the elevated plus-maze test were evaluated as indices of cerebral functional outcomes in the rat with two-vessel occlusion (2VO), which was induced by 10-min clamping of bilateral common carotid arteries. Saline or TRM (hemoglobin concentration of 6 g/dl: 2.5 or 5 ml/kg) was administered via the tail vein immediately after ischemic insult. Hippocampal LTP formation was markedly impaired and the open arm durations in the elevated plus-maze decreased significantly 4 days after 2VO, compared to those of sham-operated (control) rats, suggesting the hippocampal synaptic dysfunction and anxiogenic properties in 2VO rats. TRM (5 ml/kg) restored the hippocampal LTP formation and normalized the anxiety-related behavior. TRM also improved the decreased tissue oxygen partial pressure in the 2VO rat hippocampus, possibly due to oxygen delivery to ischemic regions. Liposome-encapsulated hemoglobin TRM might have therapeutic potentials for protecting the brain from neurological complications associated with acute ischemic stroke, as a promising blood substitute for oxygen therapy.