The effectiveness of a blood substitute is ultimately determined by the rate at which O2 arrives to the capillaries and the functional capillary density i.e., the number of flowing capillaries per unit volume of tissue. We use this rationale to analyze the effectiveness of isovolemic blood substitution with alpha alpha Hb (3,5-bis(dibromosalicyl)fumarate) compared to isooncotic and isovolemic hemodilution with dextran 70. Progressive hemodilution with each solution was performed in the awake hamster skinfold model by simultaneous isovolemic exchange of blood until the systemic hematocrit was reduced to 30% of control. Systemic hematocrit, blood pressure, heart rate were monitored. To determine O2 delivery at the microcirculatory level, functional capillary density, RBC velocity, RBC flux, capillary hematocrit were measured. Functional capillary density was maintained during moderate hemodilution with dextran 70, whereas alpha alpha Hb exchange caused a gradual reduction in the number of flowing capillaries. O2 delivery to tissue was calculated from total O2 content (RBC and plasma Hb or RBC only), blood flow, and functional capillary density. Our findings suggest that augmentation of the O2 content of blood with alpha alpha Hb substitution produces similar results in terms of capillary O2 delivery and capacity as isovolemic and isooncotic hemodilution with dextran 70.