Since the identification of the elusive endothelium-derived relaxing factor as nitric oxide (NO), much attention has been devoted to understanding its physiological effects. NO is a free radical with many roles, and owing to its neutral charge and high diffusion capacity, it appears NO is involved in every mammalian biological system. Most attention has been focused on the NO generating pathways within the endothelium; however, the recent discovery of a NO synthase (NOS)-like enzyme residing in red blood cells (RBC) has increased our understanding of the blood flow and oxygen delivery modulation by RBC. In the present review, pathways of NO generation are summarized, with attention to those residing within RBC. While the bioactivity of RBC-derived NO is still debated due to its generation within proximity of NO scavengers, current theories for NO export from RBC are explored, which are supported by recent findings demonstrating an extracellular response to RBC-derived NO. The importance of NO in the active regulation of RBC deformability is discussed in the context of the subsequent effects on blood fluidity, and the complex interplay between blood rheology and NO are summarized. This review provides a summary of recent advances in understanding the role played by RBC in NO equilibrium and vascular regulation.