The accumulation of oxidized proteins in cells and tissues is a feature of a number of age-related diseases and may also occur as a result of the aging process itself. In this article we review recent advances in our understanding of the cellular degradation of oxidized proteins directing our attention primarily to information which directly bears on the behavior of intact eukaryotic cells. We summarize new work on the key intracellular degradative machineries, proteasomes and lysosomes and examine evidence implicating an increase in protein hydrophobicity as the primary signal to the proteasome to initiate degradation. The data identifying the proteasome as the main route of degradation of oxidized proteins is examined, as well as recent data investigating changes in proteasome function after exposure of cells to oxidants and the altered catabolism of oxidized proteins in aging cells. Evidence for the cooperation between the lysosomal and proteasomal systems in the degradation of oxidized proteins is discussed. We conclude that the cellular catabolism of oxidized proteins may be a more complex process than it first appeared and suggest key issues that need to be resolved to improve our understanding of this important process.