The thiobarbituric acid reacting material produced during enzymatic microsomal lipid peroxidation has been identified as malonaldehyde. The malonaldehyde was condensed with urea to form 2‐hydroxy‐pyrimidine, which was identified by its ultraviolet spectrum, chromato‐graphic properties, and mass spectrum. Incubations with phosphatidyl choline labelled with tritiated arachidonate yielded 2‐hydroxy‐pyrimidine with a specific activity nearly equal to that of the phospholipid arachidonate. Incubations with tritiated arachidonic acid yielded 2‐hydroxy‐pyrimidine with a specific activity nearly 2 orders of magnitude less than that of free arachidonic acid. Therefore, phospholipid arachidonate has been established as the major source of the malonaldehyde produced during microsomal lipid peroxidation.