Elevated soluble (s) CD163 and free hemoglobin (Hb) levels predict fatty liver progression; however, the molecular mechanisms underlying Hb metabolism and liver injury remain undefined. We investigated the effects of endoplasmic reticular (ER) stress on red blood cell (RBC) rheology and free Hb recycling pathways. ER stress was induced in Sprague-Dawley rats by an intraperitoneal injection of tunicamycin (TM) (50, 100, and 200 μg/100 g body weight (BW)) or an intravenous injection of Hb (5 mg/100 g BW). A TM injection increased sCD163 levels, attenuated free Hb uptake, and maintained RBC aggregability. An Hb injection increased serum LVV-hemorphin-7 and total bilirubin levels, but this effect was suppressed by TM. A Western blot analysis showed that ER stress suppressed Hb degradation in the liver through downregulation of globin degradation proteins cathepsin D and glyoxalase-1, as well as heme degradation protein heme oxyganase-1 and keap-1 expression. An ER stress activator also increased the translocation of nuclear factor (NF)-κB (p65) and nuclear factor-erythroid 2-related factor 2 (Nrf2) to nuclei. In conclusion, ER stress triggers ineffective Hb metabolism via altering globin and heme iron degradation pathways. Inability to recycle and metabolize free Hb may underlie the association between iron dysfunction and liver injury.