The toxic effect of hydrophobic bile acids is claimed to be in part mediated by lipid peroxidation. Conversely, antioxidant properties of tauroursodeoxycholic acid (TUDC), a hydrophilic bile acid, have been suggested as a possible mechanism by which TUDC confers its beneficial effect in a variety of diseases. We have investigated the effect of taurodeoxycholic acid (TDC), a hydrophobic bile acid and TUDC on lipid peroxidation using a pure lipid system both in the presence and absence of iron ions. Neither TDC nor TUDC showed any effect on spontaneous lipid peroxidation of phosphatidylcholine liposomes or sodium arachidonate solution. This lack of effect excludes the possibility of direct prooxidant or antioxidant properties for TDC and TUDC. Addition of ferrous ions (0.1 mM) to the lipid system brought about a linear increase in lipid peroxidation with time. The presence of TDC caused an increase in the rate and extent of iron-stimulated lipid peroxidation. The propensity of bile acids to increase iron-induced lipid peroxidation was related to hydrophobicity of the individual bile acids, with the highest effect observed with taurolithocholic acid, whereas TUDC did not have any influence. The TDC-induced increase in the iron-stimulated lipid peroxidation was concentration dependent. Addition of TUDC (10 mM) completely abolished the, effect of TDC (2 mM) on iron-induced lipid peroxidation. This finding suggests that TUDC does not function as an antioxidant per se but may prevent lipid peroxidation caused by TDC. In conclusion, only in the presence of iron ions, hydrophobic bile acids may enhance lipid peroxidation. TUDC has no antioxidant activity per se but may counter the TDC-induced increase in iron-stimulated lipid peroxidation.