Epidemiological evidences indicate close association between inorganic arsenic exposure via drinking water and cardiovascular diseases. While the exact mechanism of this arsenic-mediated increase in cardiovascular risk factors remains enigmatic, epidemiological studies indicate a role for paraoxonase 1 (PON1) in cardiovascular diseases. To investigate the association between inorganic arsenic exposure and cardiovascular diseases, rats were exposed to sodium arsenite (trivalent; 50, 100, and 150 ppm As) and sodium arsenate (pentavalent; 100, 150, and 200 ppm As) in their drinking water for 12 weeks. PON1 activity towards paraoxon (PONase) and phenylacetate (AREase) in plasma, lipoproteins, hepatic, and brain microsomal fractions were determined. Inhibition of PONase and AREase in plasma and HDL characterized the effects of the two arsenicals. While the trivalent arsenite inhibited PONase by 33% (plasma) and 46% (HDL), respectively, the pentavalent arsenate inhibited the enzyme by 41 and 34%, respectively. AREase activity was inhibited by 52 and 48% by arsenite, whereas the inhibition amounted to 72 and 67%, respectively by arsenate. The pattern of inhibition in plasma and HDL indicates that arsenite induced a dose-dependent inhibition of PONase whereas arsenate induced a dose-dependent inhibition of AREase. In the VLDL + LDL, arsenate inhibited PONase and AREase while arsenite inhibited PONase. In the hepatic and brain microsomal fractions, only the PONase enzyme was inhibited by the two arsenicals. The inhibition was more pronounced in the hepatic microsomes where a 70% inhibition was observed at the highest dose of pentavalent arsenic. Microsomal cholesterol was increased by the two arsenicals resulting in increased cholesterol/phospholipid ratios. Our findings indicate that decreased PON1 activity observed in arsenic exposure may be an incipient biochemical event in the cardiovascular effects of arsenic. Modulation of PON1 activity by arsenic may also be mediated through changes in membrane fluidity brought about by changes in the concentration of cholesterol in the microsomes. © 2014 Wiley Periodicals, Inc. Environ Toxicol 31: 154–162, 2016.