To produce a totally artificial oxygen carrying substance, a synthetic iron-porphyrin (heme) complex that is analogous to the oxygen binding site (protoheme) of hemoglobin was embedded in the phospholipid bilayer of a liposome. The O2 carrying capacity of this liposome-embedded-heme (L/H) was examined by exchange transfusions in beagles. Six beagles were divided into two groups. In Group I, 15 ml/kg of blood was removed, and the same amount of L/H solution was injected intravenously. In Group II, 30 ml/kg of blood was withdrawn, and the same amount of the L/H solution was injected intravenously. The mean L/H concentration in the blood was 0.9 mM in Group I and 1.5 mM in Group II. The oxygen volume transported by 1 mM of the L/H at 1 L/min of cardiac output in Groups I and II were 15 and 17 ml/mM.L.min, respectively. The oxygen volume consumed from 1 mM of the L/H at 1 L/min of cardiac output in Groups I and II were 7.7 and 8.3 ml/mM.L.min, respectively. O2 volume transported by the L/H in Groups I and II were 8 and 15%, respectively. O2 volume consumed from the L/H in Groups I and II were 12 and 24%, respectively. Thus, this liposome-embedded-heme has the ability to combine with oxygen, to transport it to the tissue, and to release it in the tissue. The oxygen volumes transported by and consumed from the L/H were proportional to the L/H concentration in the blood.