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The giant extracellular hemoglobin (erythrocruorin) from the earth worm (Lumbricus terrestris) has shown promise as a potential hemoglobin-based oxygen carrier (HBOC) in in vivo animal studies. An important beneficial characteristic of this hemoglobin (LtHb) is the large number of heme-based oxygen transport sites that helps overcome issues of osmotic stress when attempting to provide enough material for efficient oxygen delivery. A potentially important additional property is the capacity of the HBOC either to generate nitric oxide (NO) or to preserve NO bioactivity to compensate for decreased levels of NO in the circulation. The present study compares the NO-generating and NO bioactivity-preserving capability of LtHb with that of human adult hemoglobin (HbA) through several reactions including the nitrite reductase, reductive nitrosylation, and still controversial nitrite anhydrase reactions. An assignment of a heme-bound dinitrogen trioxide as the stable intermediate associated with the nitrite anhydrase reaction in both LtHb and HbA is supported based on functional and EPR spectroscopic studies. The role of the redox potential as a factor contributing to the NO-generating activity of these two proteins is evaluated. The results show that LtHb undergoes the same reactions as HbA and that the reduced efficacy for these reactions for LtHb relative to HbA is consistent with the much higher redox potential of LtHb. Evidence of functional heterogeneity in LtHb is explained in terms of the large difference in the redox potential of the isolated subunits.