Xanthine oxidase, acting on acetaldehyde under aerobic conditions, produces a flux of O2- and H2O2 which attacks artificial liposomes and washed human erythrocytes. The liposomes were peroxidized and the erythrocytes suffered oxidation of hemoglobin followed by lysis. The oxidation of hemoglobin followed by lysis. The oxidation of hemoglobin, within the exposed erythrocytes, could be largely prevented by prior conversion to carbon monoxyhemoglobin, without preventing lysis. Hemolysis thus appeared to be a consequence of direct oxidative attack on the cell stroma. The enzyme-generated flux of O2- and of H2O2 also inactivated the xanthine oxidase. Superoxide dismutase or catalase, present in the suspending medium, protected the liposomes against peroxidation, the erythrocytes against lysis, and the xanthine oxidase against inactivation. Scavengers of O2('deltag), such as histidine or 2,5-dimethylfuran, which do not react with O2- or H2O2, also prevented peroxidation of liposomes and lysis of erythrocytes when present at low concentrations. In contrast a scavenger of OH-, such as mannitol was ineffective at low concentrations and provided significant protection only at much higher concentrations. It is proposed that O2- and H2O2 cooperated in producing OH- and O2('deltag), which were the proximate causes of lipid peroxidation and of hemolysis.