In Parkinson's disease (PD), dopamine neurons containing neuromelanin selectively degenerate. Neuromelanin binds iron and accumulates in aging. Iron accumulates in reactive form during aging, PD, and is involved in neurodegeneration. It is not clear how the interaction of neuromelanin and iron can be protective or toxic by modulating redox processes. Here, we investigated the interaction of neuromelanin from human substantia nigra with iron in the presence of ascorbic acid, dopamine, and hydrogen peroxide. We observed that neuromelanin blocks hydroxyl radical production by Fenton's reaction, in a dose-dependent manner. Neuromelanin also inhibited the iron-mediated oxidation of ascorbic acid, thus sparing this major antioxidant molecule in brain. The protective effect of neuromelanin on ascorbate oxidation occurs even in conditions of iron overload into neuromelanin. The blockade of iron into a stable iron-neuromelanin complex prevents dopamine oxidation, inhibiting the formation of neurotoxic dopamine quinones. The above processes occur intraneuronally in aging and PD, thus showing that neuromelanin is neuroprotective. The iron-neuromelanin complex is completely decomposed by hydrogen peroxide and its degradation rate increases with the amount of iron bound to neuromelanin. This occurs in PD when extraneuronal iron-neuromelanin is phagocytosed by microglia and iron-neuromelanin degradation releases reactive/toxic iron.