This study investigated whether a lower effective [Hb], induced by carbon monoxide (CO) inhalation, reduces the peak oxygen uptake ( VO 2 peak ) and the maximal lactate steady state (MLSS) and whether training status explains individual variation in these impairments. Healthy young participants completed two ramp incremental tests (n = 20, 10 female) and two trials at MLSS (n = 16, eight female) following CO rebreathe tests and sham procedures (SHAM) in random orders. All fitness variables were normalized to fat-free mass (FFM) to account for sex-related differences in body composition, and males and females were matched for aerobic fitness. The VO 2 peak (mean (SD): −4.2 (3.7)%), peak power output (PPO) (−3.3 (2.2)%) and respiratory compensation point (RCP) (−6.3 (4.5)%) were reduced in CO compared with SHAM (P < 0.001 for all), but the gas exchange threshold (−3.3 (7.1)%) was not (P = 0.077).Decreases in VO 2 peak (r = −0.45; P = 0.047) and PPO (r = −0.49; P = 0.029) in CO were correlated with baseline aerobic fitness. Compared to SHAM, physiological and perceptual indicators of exercise-related stress were exacerbated by CO while cycling at MLSS. Notably, the mean blood lactate concentration ([La]) increased (i.e., Δ[La] >1.0 mM) between 10 min (5.5 (1.4) mM) and 30 min (6.8 (1.3) mM; P = 0.026) in CO, with 9/16 participants classified as unstable. These unstable participants had a higher VO 2 peak (66.2 (8.5) vs. 56.4 (8.8) ml kg FFM −1 min −1 , P = 0.042) and VO 2 at MLSS (55.8 (7.0) vs. 44.3 (7.0) ml kg FFM −1 min −1 , P = 0.006) compared to the stable group.In conclusion, a reduced O 2 -carrying capacity decreased maximal and submaximal exercise performance, with higher aerobic fitness associated with greater impairments in both.