1. The extracellular proteins caeruloplasmin and transferrin have important antioxidant properties by virtue of the fact that they inhibit iron-dependent free radical production, and ensuing damage to cells. 2. Albumin is a plasma protein which can loosely bind iron, but the redox activity of this iron has not been fully investigated. 3. The ability of albumin to bind iron and to prevent iron-dependent lipid peroxidation in vitro was investigated using liposomes and a rat brain homogenate system. 4. The iron-binding capacity of albumin was found to be substantial, and albumin inhibited lipid peroxidation in a concentration-dependent manner in both systems used. 5. This antioxidant property of albumin may be especially important in the plasma of babies born prematurely, in whom transferrin and caeruloplasmin concentrations are often very low, and in whom non-transferrin-bound iron has been detected in the plasma.