Nitrated derivatives of unsaturated fatty acids are formed under oxidative and nitrative stress conditions, and are detected and structurally characterized in cell membranes, cardiac tissue, human plasma, and urine. Nitro-fatty acids display pleiotropic activities, including modulation of macrophage activation, prevention of leukocyte and platelet activation, and promotion of blood vessel relaxation. However, mechanisms of formation and levels reached in inflammatory milieu are poorly characterized. In this review, we discuss potential mechanisms of formation of nitro-fatty acids and their key chemical and biochemical properties. A major focus is to analyze nitrated lipids as novel signaling mediators leading to secondary changes in protein function via electrophilic-based modifications as well as inhibition of inflammatory cell function, thus representing the convergence of lipid and nitric oxide signaling pathways.