Many biochemical reactions generate oxygen free radicals that are now recognized to participate in the development or promotion of a number of pathological conditions. Because of its ability to generate or interact with oxygen free radicals, cell-free hemoglobin may be regarded as a toxic substance. Spontaneous auto-oxidation of hemoglobin is an important concern in the use of chemically modified hemoglobin as an oxygen-carrying blood substitute. Oxidation of a number of modified and unmodified human and animal hemoglobins by superoxide and peroxide have been extensively studied. This is part of our continuous search for animal or mutant hemoglobins that exhibit favorable oxidation-reduction reactions, which we hope will enable a better understanding of the relationship between heme pocket chemistry and the ability of hemoglobin to generate or interact with oxygen free radicals. We have obtained data on candidate cell-free hemoglobin blood substitutes that show that their rates of oxidation, their generation of activated oxygen species and their cytochrome P450-like activity functions are not determined by their oxygen affinities, so that oxidative and oxygen carrying functions are independently selectable parameters. In this regard, the potential oxidative toxicity of hemoglobin may well be determined by the stereochemistry of its heme pocket. Hemoglobin interactions with phospholipid components present in the cellular membrane were explored recently utilizing a model phosphotidyl choline liposome and liposome containing cytochrome C oxidase. Once in contact, both modified and unmodified hemoglobins triggered and maintained severe radical mediated membrane damage. Interactions of modified hemoglobins with liposomal membrane and with membrane bound enzyme, although artificial, may provide some insight of the nature of the interaction of modified hemoglobins with physiological membranes.