Myeloperoxidase (MPO) is expressed in Alzheimer disease (AD) but not normal aged brain. A functional -463G/A MPO promoter polymorphism has been associated with AD risk through as yet unidentified mechanisms. Here we report that human MPO-463G allele, but not MPO-463A or mouse MPO, is strongly expressed in astrocytes and deposited in plaques in huMPO transgenic mice crossed to the APP23 model. MPO is similarly expressed in astrocytes in human AD tissue. In cortical homogenates of the MPOG-APP23 model, MPO expression correlated with increased levels of a lipid peroxidation product, 4-hydroxynonenal. Fluorescence high-performance liquid chromatography and electrospray ionization mass spectroscopy identified selective accumulation of phospholipid hydroperoxides in two classes of anionic phospholipids, phosphatidylserine (PS-OOH) and phosphatidylinositol (PI-OOH). The same molecular species of PS-OOH and PI-OOH were elevated in human AD brains as compared with non-demented controls. Augmented lipid peroxidation in MPOG-APP23 mice correlated with greater memory deficits. We suggest that aberrant huMPO expression in astrocytes leads to a specific pattern of phospholipid peroxidation and neuronal dysfunction contributing to AD.