Although oxidative stress has been implicated in development of gut pathologies, its role in intestinal fat transport has not been investigated. We assessed the effect of Fe(2+)-ascorbate-mediated lipid peroxidation on lipid synthesis, apolipoprotein biogenesis, and lipoprotein assembly and secretion. Incubation of postconfluent Caco-2 cells with iron(II)-ascorbate (0.2 mM/2 mM) in the apical compartment significantly promoted malondialdehyde formation without affecting sucrase activity, transepithelial resistance, DNA and protein content, and cell viability. However, addition of the oxygen radical-generating system reduced 1) [(14)C]oleic acid incorporation into cellular triglycerides (15%, P < 0.0002) and phospholipids (16%, P < 0.0005); 2) de novo synthesis of cellular apolipoprotein A-I (apo A-I) (18%, P < 0.05), apo A-IV (38%, P < 0.05), and apo B-48 (45%, P < 0.003) after [(35)S]methionine addition; and 3) production of chylomicrons (50%), VLDL (40%), LDL (37%), and HDL (30%) (all P < 0.0001). In contrast, increased total cellular cholesterol formation (96%, P < 0.0001), assayed by [(14)C]acetate incorporation, was noted, attributable to marked elevation (70%, P < 0.04) in activity of DL-3-hydroxy-3-methyl-glutaryl-CoA reductase, the rate-limiting enzyme in cholesterol synthesis. The ratio of Acyl-CoA to cholesterol acyltransferase, the esterifying cholesterol enzyme, remained unchanged. Fe(2+)-ascorbate-mediated lipid peroxidation modifies intracellular fat absorption and may decrease enterocyte efficiency in assembling and transporting lipids during gut inflammation.