Free radical production is implicated in the pathogenesis of diabetes mellitus, where several pathways and different mechanisms were suggested in the pathophysiology of the complications. In this study, we used electron paramagnetic resonance (EPR) spectroscopy combined with in vivo spin-trapping techniques to investigate the sources and mechanisms of free radical formation in streptozotocininduced diabetic rats. Free radical production was directly detected in the diabetic bile, which correlated with lipid peroxidation in the liver and kidney. EPR spectra showed the trapping of a lipidderived radical. Such radicals were demonstrated to be induced by hydroxyl radical through isotope labeling experiments. Multiple enzymes and metabolic pathways were examined as the potential source of the hydroxyl radicals using specific inhibitors. Neither xanthine oxidase, cytochrome P450s, the Fenton reaction, nor macrophage activation were required for the production of radical adducts. Interestingly, inducible nitric oxide synthase (apparently uncoupled) was identified as the major source of radical generation. The specific iNOS inhibitor 1400W as well as L-arginine pretreatment reduced the EPR signals to baseline levels, implicating peroxynitrite as the source of hydroxyl radical production. Applying immunological techniques, we localized iNOS overexpression in the liver and kidney of diabetic animals, which was closely correlated with the lipid radical generation and 4-hydroxynonenal-adducted protein formation, indicating lipid peroxidation. In addition, protein oxidation to protein free radicals occurred in the diabetic target organs. Taken together, our studies support inducible nitric oxide synthase as a significant source of EPR-detectable reactive intermediates, which leads to lipid peroxidation and may contribute to disease progression as well.