Lipid oxidation and nitration represents a novel area of research of relevance in the understanding of inflammatory processes. Peroxynitrite, the product of the diffusion-limited reaction between nitric oxide and superoxide anion, mediates oxidative modifications in lipid systems including cell membranes and lipoproteins. In this review, we discuss the mechanisms of lipid oxidation and nitration by peroxynitrite as well as the influence of physiological molecules and cell targets to redirect peroxynitrite reactivity. We also provide evidence to support that oxidation/nitration of lipids results in the formation of novel signaling modulators of key lipid-metabolizing enzymes.