This paper reviews recent data relevant to the antioxidant effects of melatonin with special emphasis on the changes produced in polyunsaturated fatty acids located in the phospholipids of biological membranes. The onset of lipid peroxidation within cellular membranes is associated with changes in their physicochemical properties and with the impairment of protein functions located in the membrane environment. All cellular membranes are especially vulnerable to oxidation due to their high concentration of polyunsaturated fatty acids. These processes combine to produce changes in the biophysical properties of membranes that can have profound effects on the activity of membrane-bound proteins. This review deals with aspects for lipid peroxidation of biological membranes in general, but with some emphasis on changes of polyunsaturated fatty acids, which arise most prominently in membranes and have been studied extensively in our laboratory. The article provides current information on the effect of melatonin on biological membranes, changes in fluidity, fatty acid composition and lipid-protein modifications during the lipid peroxidation process of photoreceptor membranes and modulation of gene expression by the hormone and its preventive effects on adriamycin-induced lipid peroxidation in rat liver. Simple model systems have often been employed to measure the activity of antioxidants. Although such studies are important and essential to understand the mechanisms and kinetics of antioxidant action, it should be noted that the results of simple in vitro model experiments cannot be directly extrapolated to in vivo systems. For example, the antioxidant capacity of melatonin, one of the important physiological lipophilic antioxidants, in solution of pure triglycerides enriched in omega-3 polyunsaturated fatty acids is considerably different from that in subcellular membranes.