S-Nitrosothiols are potentially important mediators of biological processes including vascular function, apoptosis, and thrombosis. Recent studies indicate that the concentrations of S-nitrosothiols in the plasma from healthy individuals are lower than previously reported and in the range of 30–120 nM. The mechanisms of formation and metabolism of these low nM concentrations, capable of exerting biological effects, remain unknown. An important issue that remains unresolved is the significance of the reactions of low fluxes of nitric oxide (NO) with oxygen to form S-nitrosothiols in a complex biological medium such as plasma, and the impact of red blood cells on the formation of S-nitrosothiols in blood. These issues were addressed by exposing plasma to varying fluxes of NO and measuring the net formation of S-nitrosothiols. In the presence of oxygen and physiological fluxes of NO, the predominant S-nitrosothiol formed is S-nitroso-albumin at concentrations in the high nM range (∼400–1000 nM). Although the formation of S-nitrosothiols by NO was attenuated in whole blood, presumably by erythrocytic hemoglobin, significant amounts of S-nitrosothiols within the physiological range of S-nitrosothiol concentrations (∼80 nM) were still formed at physiological fluxes of NO. Little is known about the stability of S-nitroso-albumin in plasma, and this is central to our understanding of the biological effectiveness of S-nitrosothiols. Low molecular weight thiols decreased the half-life of S-nitroso-albumin in plasma, and the stability of S-nitroso-albumin is enhanced by the alkylation of free thiols. Our data suggests that physiologically relevant concentrations of S-nitrosothiols can be formed in blood through the reaction of NO with oxygen and proteins, despite the low rates of reaction of oxygen with NO and the presence of erythrocytes.