In a case of Hallervorden-Spatz syndrome, neuromelanin was found in neurons and, extracellularly, In the globus pallidus and pars reticulata of the substantia nigra. Some cells of pars compacta contained Lewey bodies. We propose that neuromelanin is formed by a metal-catalyzed pseudoperoxidation of lipofuscin, involving increased amounts of iron and copper in the affected regions. A similar mechanism of spheroid formation, often associated with neuromelanin, may result from pathologic accumulations of lipid peroxides during fatty acid oxidation of myelin. We suggest that neuromelanin is a late stage in the metabolism of intraneuronal and extraneuronal lipopigments. Discrepancies among the histochemical features of the pigment in different cases may be explained by differences in amounts of lipofuscin, neuromelanin, and their precursors. We propose relation of peroxidation to the pathogenesis of some related degenerative diseases.