The presence of blood in your sputum or phlegm usually indicates at least a little bleeding in your respiratory tract somewhere between your nose and the bottom of your lungs.An innocuous nosebleed, for example, might cause some red postnasal drip that you cough up. A harsh coughing spell, for example, could have ruptured a blood vessel in your lung. Bronchitis and certain strains of pneumonia may cause blood vessels in the lungs to bleed. The source of the blood isn't always confined to the respiratory tract. You could also be bleeding in your stomach and coughing it up. If the blood is a fresh bright red, you're still bleeding. If it's a darker red, or perhaps brown or rust-colored, the blood has dried or clotted