Oxygen delivery has evolved as a therapy of widespread interest in the clinical setting, especially in emergency medicine and anesthesiology. With the widespread recognition of blood-borne infections during the last two decades and the looming shortage of donor blood in future, efforts to formulate an artificial substitute for oxygen carrying capacity of RBCs have increased. Such blood substitutes, defined more correctly as oxygen therapeutics, are particularly valuable in circumstances such as war and trauma situations where properly matched blood may not be immediately available or is not accepted by the recipients for religious reasons. Several elegant formulations of hemoglobin, both free and encapsulated, have evolved recently and are collectively referred to as hemoglobin-based oxygen carriers (HBOCs). Few HBOCs have successfully entered into the clinical phase. This review discusses formulation requirements of HBOCs from a physiological viewpoint. Physico-pharmaceutical parameters, such as colloidal oncotic pressure, osmolality, viscosity, sterility, apyrogenicity and shelf-stability are traditionally a concern for large volume parenterals meant for resuscitation purposes. At the same time, properties such as oxygen affinity, hemoglobin content and in vivo efficacy of oxygen carriers are specific to HBOCs. Owing to the presence of a very active and functional protein (hemoglobin), requirements for adequate performance of HBOCs significantly differ from those of other large-volume parenterals, such as lactated Ringers solution, and plasma expanders, such as dextran or albumin solutions.