When neutrophils phagocytose bacteria, they release myeloperoxidase (MPO) into phagosomes to catalyse the conversion of superoxide to the potent antimicrobial oxidant hypochlorous acid (HOCl). Here we show that within neutrophils, MPO is inactivated by HOCl. In this study, we aimed to identify the effects of HOCl on the structure and function of MPO, and determine the enzyme's susceptibility to oxidative inactivation during phagocytosis. When hydrogen peroxide was added to a neutrophil granule extract containing chloride, MPO activity was rapidly lost in a HOCl-dependent reaction. With high concentrations of hydrogen peroxide, western blotting demonstrated that MPO was both fragmented and converted to high molecular weight aggregates. Using the purified enzyme, we showed that HOCl generated by MPO inactivated the enzyme by destroying its prosthetic heme groups and releasing iron. MPO protein was additionally modified by forming high molecular weight aggregates. Before inactivation occurred, MPO chlorinated itself to convert most of its amine groups to dichloramines. When human neutrophils phagocytosed Staphylococcus aureus, they released MPO that was largely inactivated in a process that required production of superoxide. Enzyme inactivation occurred inside neutrophils because it was not blocked when extracellular HOCl was scavenged with methionine. The inactivated enzyme contained a chlorinated tyrosine residue, establishing that it had reacted with HOCl. Our results demonstrate that MPO will substantially inactivate itself during phagocytosis, which may limit oxidant production inside phagosomes. Other neutrophil proteins are also likely to be inactivated. The chloramines formed on neutrophil proteins may contribute to the bactericidal milieu of the phagosome.