We have isolated a heme protein from canine midbrains that possesses potent peroxidase activity. This enzyme catalyzes the oxidation of dopamine to neuromelanin in the presence of H2O2. We have further shown that the isolated peroxidase possesses potent cytotoxic activity in the presence of superoxide or H2O2 and Cl-. The enzyme possesses an endogenous NAD(P)H oxidase activity that can promote the cytotoxic activity by virtue of its production of superoxide. Other enzymes such as dihydroorotate dehydrogenase and galactose oxidase, which produce O2- and H2O2, respectively, are also effective in promoting the cytotoxic activity of the brainstem peroxidase. Although rat erythrocytes were routinely used as the target cell, other cell types, including rat hepatoma and mouse neuroblastoma cells, are also susceptible to the toxic action of the peroxidase. The cytotoxic action of the brainstem peroxidase is dramatically enhanced by kainic acid and is significantly enhanced by Mn2+, whereas dopamine was found to be a potent inhibitor of the cytotoxic activity. Based on these findings, we postulate a central role for the brainstem peroxidase in dopamine metabolism as well as in the biochemical and anatomical changes associated with Parkinson's disease.