Accumulation of the insoluble lipid-protein complex, ceroid, is a characteristic of atherosclerotic plaques. To determine whether deficient processing of cholesteryl esters in oxidized (ox) low density lipoprotein (LDL) contributes to ceroid formation, we studied the hydrolysis of internalized [3H] cholesteryl linoleate (CL) in oxLDL by mouse peritoneal macrophages (MPM). The hydrolysis by MPM of [3H]CL incorporated into oxLDL or LDL did not differ, suggesting that products of lipid and/or apoB oxidation had no impact on the lysosomal hydrolysis of [3H]CL. To evaluate the hydrolysis of oxCL by MPM, we subjected extensively ox[3H]CL to fractionation by TLC. The predominant fraction (D) consisted of sterols and oxysterols esterified to scission products of oxidized fatty acids containing terminal carbonyl groups, i.e., lipid core aldehydes. The extent of hydrolysis of [3H]-fraction D by MPM cultures, as well as by MPM extracts at pH 4.0, was significantly reduced when compared to the hydrolysis of intact [3H]CL. Fraction D also formed complexes with serum proteins, and the purified core aldehyde, cholesteryl 9-oxononanoate reacted with epsilon-amino group of lysines. Finally, several cholesteryl ester aldehydes were detected in lipid extracts of human atheroma. These results suggest that decomposition products of extensively oxidized cholesteryl linoleate that are also present in atherosclerotic lesions, are not adequately degraded by mouse peritoneal macrophage lysosomes and could interact with proteins to form ceroid.