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Ebselen (2-phenyl-1,2-benzisoselenazol-3(2H)-one), a lipid-soluble organoselenium compound, exhibits numerous biological activities both in vitro and in vivo systems. This compound is undergoing clinical trials for a number of disease states such as stroke and hearing loss. It is known that ebselen exhibits glutathione peroxidase activity (GPx) and is a remarkable scavenger of reactive oxygen species (ROS) such as peroxynitrite (PN). The rate of the reaction between ebselen and PN has been shown to be about three orders of magnitude higher than that of naturally occurring small molecules, such as cysteine, methionine and ascorbate. It is also known that ebselen and related compounds effectively protect against lipid peroxidation induced by transition metal ions. However, the mechanism by which ebselen exerts its antioxidant activity and the importance of the cyclic selenazole moiety are still not well-understood. In this article, the complex chemical mechanisms involved in the antioxidant activity of ebselen and related compounds are discussed.