Myeloperoxidase (MPO), an abundant enzyme in phagocytes, has been implicated in the pathogenesis of various inflammatory diseases including atherosclerosis. The major oxidant produced by MPO, hypochlorous acid (HOCl), is able to modify a great variety of biomolecules by chlorination and/or oxidation. In this paper the reactions of lipids (preferentially unsaturated fatty acids and cholesterol) with either reagent HOCl or HOCl generated by the MPO-hydrogen peroxide-chloride system are reviewed. One of the major issues has been whether the reaction of HOCl with lipids of low density lipoprotein (LDL) yields predominantly chlorohydrins or lipid hydroperoxides. Electrospray mass spectrometry provided direct evidence that chlorohydrins rather than peroxides are the major products of HOCl- or MPO-treated LDL phosphatidylcholines. Nevertheless lipid peroxidation is a possible alternative reaction of HOCl with polyunsaturated fatty acids if an additional radical source such as pre-formed lipid hydroperoxides is available. In phospholipids carrying a primary amino group such as phosphatidylethanolamine chloramines are the preferred products compared to chlorohydrins. Cholesterol can be converted by HOCl to great variety of oxysterols besides three isomers of chlorohydrins. For the situation in vivo it appears that the type of reaction occurring between HOCl and lipids would very much depend on the circumstances, e.g. the pH and the presence of radical initiators. The biological effects of lipid chlorohydrins are not yet well understood. It has been shown that chlorohydrins of both unsaturated fatty acids as well as of cholesterol may cause lysis of target cells, possibly by disruption of membrane structures.