The slow-reacting substance (SRS) bioactivity of leukotrienes C4 (LTC4) and D4 (LTD4) was rapidly decreased by incubation with eosinophil peroxidase (EPO), H2O2, and iodide, bromide, or to a lesser degree, chloride, LTB4 chemotactic activity was also decreased by the EPO-H2-H2-halide system, although at a slower rate. Myeloperoxidase could substitute for EPO in these reactions. Leukotriene inactivation was greatly decreased or abolished by deletion of any of the components of the system or by the addition of the hemeprotein inhibitors, azide, cyanide, or aminotriazole, indicating a requirement for peroxidase. The H2O2 concentration employed in the above studies was 10(-4) M. H2O2 at higher concentrations (5 x 10(-4) to 10(-2) M) inactivated LTC4 and LTD4 in the absence of EPO and a halide but had no effect on the chemotactic activity of LTB4. We have previously shown that horse eosinophils stimulated with the calcium ionophore A23187 generate SRS. In the present study, eosinophils stimulated in this way were found to release extracellularly both H2O2 and EPO. Incubation of eosinophils with azide that inhibits EPO, and catalase that degrades H2O2, significantly increased the amount of SRS activity detected in the extracellular medium after A23187 stimulation. These findings suggests eosinophils may play an important modulating role in hypersensitivity reactions both by the production of leukotrienes and by their inactivation through the release of H2O2 and EPO.