Individual nonesterified fatty acids were bound to albumin in vitro and these fatty acid albumin complexes were used to study their effect on lipid peroxidation in liver microsomes. Peroxidation was induced by various methods and malondialdehyde (MDA) was measured as an index of peroxidation. Among the fatty acids tested, albumin-bound monounsaturated fatty acids showed more inhibition of peroxidation as compared to other fatty acids. Increasing the concentration of iron in the peroxidizing system, partially reversed the inhibition by fatty acids. Moreover, albumin-bound fatty acid did not inhibit iron independent peroxidation. This suggests that, like nonesterified fatty acids, albumin-bound fatty acids inhibit peroxidation by chelating the iron. Albumin fatty acid complex, similar to the fatty acid composition present in the circulating albumin, also showed inhibition of peroxidation. These data indicate that nonesterified fatty acids even when bound to albumin are capable of inhibiting peroxidation and circulating albumin, which contains various fatty acids bound to it, may impart some antioxidant effect in addition to other plasma antioxidants.