From a joyent FAQ:
What is the memory limit on a node process?
Currently, by default v8 has a memory limit of 512mb on 32-bit
systems, and 1gb on 64-bit systems. The limit can be raised by setting
--max_old_space_size to a maximum of ~1024 (~1 GiB) (32-bit) and ~1741 (~1.7GiB) (64-bit), but it is recommended that you split your single
process into several workers if you are hitting memory limits.
If you show more detail about what's in the file and what you're doing with it, we can probably offer some ideas on how to work with it in chunks. If it's pure data, then you probably want to be using a database and let the database handle getting things from disk as needed and manage the memory.
Here's a fairly recent discussion of the issue: https://code.google.com/p/v8/issues/detail?id=847
And, here's a blog post that claims you can edit the V8 source code and rebuilt node to remove the memory limit. Try this at your own discretion.