The effect of confinement on the structure of hemoglobin (Hb) within polymer capsules was investigated here. Hemoglobin transformed from an aggregated state in solution to a nonaggregated state when confined inside the polymer capsules. This was directly confirmed using synchrotron small-angle X-ray scattering (SAXS) studies. The radius of gyration (R-g) and polydispersity (p) of the proteins in the confined state were smaller compared to those in solution. In fact, the R-g value is very similar to theoretical values obtained using protein structures generated from the Protein Databank. In the temperature range (25-85 degrees C, Tm 59 degrees C), the R-g values for the confined Hb remained constant. This observation is in contrary to the increasing R-g values obtained for the bare Hb in solution. This suggested higher thermal stability of Hb when confined inside the polymer capsule than when in solution. Changes in protein configuration were also reflected in the protein function. Confinement resulted in a beneficial enhancement of the electroactivity of Hb. While Hb in solution showed dominance of the cathodic process (Fe3+ -> Fe2+), efficient reversible Fe3+/Fe2+ redox response is observed in the case of the confined Hb. This has important protein functional implications. Confinement allows the electroactive heme to take up positions favorable for various biochemical activities such as sensing of analytes of various sizes from small to macromolecules and controlled delivery of drugs.