Protein tyrosine oxidation mechanisms in hydrophobic biocompartments (i.e., biomembranes, lipoproteins) leading to nitrated, dimerized, and hydroxylated products are just starting to be appreciated. This chapter reports on the use of the hydrophobic tyrosine analog N-t-BOC-l-tyrosine tert-butyl ester (BTBE) incorporated to phosphatidyl choline liposomes to study peroxynitrite-dependent tyrosine oxidation processes in model biomembranes. The probe proved to be valuable in defining the role of biologically relevant variables in the oxidation process, including the action of hydrophilic and hydrophobic peroxynitrite and peroxynitrite-derived free radical scavengers, transition metal catalysts, carbon dioxide, molecular oxygen, pH, and fatty acid unsaturation degree. Moreover, detection of the BTBE phenoxyl radical and relative product distribution yields of 3-nitro-, 3,3'-di-, and 3-hydroxy-BTBE in the membrane fully accommodate with a free radical mechanism of tyrosine oxidation, with physical chemical and biochemical determinants that in several respects differ of those participating in aqueous environments. The methods presented herein can be extended to explore the reaction mechanisms of tyrosine oxidation by other biologically relevant oxidants and in other hydrophobic biocompartments.