The experiments reported here were undertaken to test the hypothesis that the antioxidative, reduced form of hydrophobic phase coenzyme Q (CoQ) may be generated and maintained by the two-electron quinone reductase, DT-diaphorase [NAD(P)H:(quinone-acceptor) oxidoreductase, EC 1.6.99.2] by catalyzing formation of the hydroquinone form of CoQ. This enzyme was isolated and purified from rat liver cytosol and its reduction of several CoQ homologs incorporated into large unilamellar vesicles (LUVETs) was demonstrated. The addition of NADH and DT-diaphorase to LUVETs and to multilamellar vesicles (MLVs) containing CoQ homologs, including CoQ9 and CoQ10, resulted in essentially complete reduction of the CoQ. Incorporation of either CoQ9H2 or CoQ10H2 and the lipophylic radical generator 2,2'-azobis(2,4-dimethylvaleronitrile) (AMVN) into MLVs in the presence of DT-diaphorase and NADH maintained the reduced state of CoQ and inhibited lipid peroxidation. The reaction between DT-diaphorase and CoQ was also demonstrated in isolated rat liver hepatocytes in which incorporation of CoQ10 provided protection from adriamycin (adr)-induced mitochondrial membrane damage. The role of DT-diaphorase in the antioxidant activity of CoQ was demonstrated by the co-incorporation of dicoumarol (dic), a potent inhibitor of DT-diaphorase, resulting in a loss of protection by incorporated CoQ10. These results support the antioxidant function of DT-diaphorase in both artificial and natural membrane systems by acting as a two-electron CoQ reductase which forms and maintains CoQ in the reduced state.