Recent studies have suggested that binding of oxygen to hemoglobin (Hb) facilitates reactions of nitric oxide (NO) that lead to production of S-nitrosohemoglobin (SNO-Hb), and that vasodilator S-nitrosthiol (SNO) is dispensed by red blood cells (RBCs) at low oxygen tension (pO2) to dilate blood vessels. In human lungs, NO bioactivity serves to attenuate hypoxic pulmonary vasoconstriction (HPV). We therefore considered the possibility that RBC-SNO may oppose HPV and that defective vasodilation by RBCs may contribute to the pathophysiology of pulmonary arterial hypertension (PAH). Here we report that RBCs from patients with PAH exhibit substantial depletion of SNO-Hb and consequent impairment in hypoxia-mediated vasodilation. Furthermore, levels of RBC-NO correlated inversely with pulmonary artery pressures. A SNO-Hb deficiency characteristic of PAH was reproduced in control RBCs by hypoxia: loss of SNO-Hb was accompanied by a buildup of heme-NO species that are deficient in the pO2-governed intramolecular transfer of NO to cysteine thiol, yielding RBCs deficient in NO bioactivity. SNO-deficient RBCs produced exaggerated HPV responses as compared to SNO-replete RBCs. In PAH patients, SNO-Hb repletion fully restored the hypoxic vasodilator activity of RBCs. Our results suggest that a deficiency in RBC-SNO contributes to pulmonary hypertension and hypoxemia, and that repletion of RBC-SNO represents a rational strategy for treating PAH patients.