Local increases in blood flow – ‘hypoxic vasodilation’ – confer cellular protection in the face of reduced oxygen delivery. The physiological relevance of this response is well established, yet ongoing controversy surrounds its underlying mechanisms. We sought to confirm that early hypoxic vasodilation is a nitric oxide (NO)‐mediated phenomenon and to study putative pathways for increased levels of NO, namely production from NO synthases, intravascular nitrite reduction, release from pre‐formed stores, and reduced deactivation by cytochrome c oxidase. Experiments were performed on spontaneously breathing, anaesthetized, male Wistar rats undergoing short‐term systemic hypoxaemia, who received pharmacological inhibitors and activators of the various NO pathways. Arterial blood pressure, cardiac output, tissue oxygen tension and the circulating pool of NO metabolites (oxidation, nitrosation and nitrosylation products) were measured in plasma and erythrocytes. Hypoxaemia caused a rapid and sustained vasodilation, which was only partially reversed by non‐selective NOS inhibition. This was associated with significantly lower plasma nitrite, and marginally elevated nitrate levels, suggestive of nitrite bioinactivation. Administration of sodium nitrite had little effect in normoxia, but produced significant vasodilation and increased nitrosylation during hypoxaemia that could not be reversed by NO scavenging. Methodological issues prevented assessment of the contribution, if any, of reduced deactivation of NO by cytochrome c oxidase. In conclusion, acute hypoxic vasodilation is an adaptive NO‐mediated response that is conferred through bioactive metabolites rather than free NO from haemoglobin‐mediated reduction of nitrite. This article is protected by copyright. All rights reserved