Apolipoprotein E (apoE) is a 34-kDa lipid-associated protein present in plasma and in the central nervous system. Previous studies have demonstrated that apoE has multiple functions, including the ability to transport lipids, regulate cell homeostasis, and inhibit lipid oxidation. The lipid binding domain of apoE has been localized to the carboxyl-terminal domain, whereas a cluster of basic amino acid residues within the N-terminal domain is responsible for its receptor binding activity. This study was undertaken to identify the domain in apoE responsible for its antioxidant activity. Results showed that apoE inhibits Cu(2+)-induced LDL oxidation by delaying conjugated diene formation in a concentration-dependent manner. Reductive methylation of lysine residues or cyclohexanedione modification of arginine residues in apoE abolished its ability to inhibit LDL oxidation. Additional studies showed that a 22-kDa peptide containing the N-terminal domain of apoE3 was more effective than a similar peptide with the apoE4 sequence in inhibiting Cu(2+)-induced LDL oxidation. In contrast, the 10-kDa peptide that contains the C-terminal domain of apoE was ineffective. Inhibition of Cu(2+)-induced LDL oxidation can also be accomplished with a peptide containing either a single sequence or a tandem repeat sequence of the receptor binding domain (residues 141-155) of apoE. Taken together, these results localized the antioxidant domain of apoE to its receptor binding domain and the basic amino acids in this domain are important for its antioxidant activity.