Peroxynitrite (ONOO), a potent cytotoxic oxidant formed by the reaction of nitric oxide (*NO) and superoxide radical (*O2), may be rapidly lethal in a cellular milieu due to oxidization and nitration processes. In the present study, hydroquinone displayed strong ONOO scavenging activity and inhibitory effect on NO production in murine macrophage RAW264.7 cells. Hydroquinone strongly scavenged ONOO induced dihydrorhodamine 123 oxidation in a dose-dependent manner compared with other reactive species such as *O2 and *NO. Hydroquinone also decreased levels of ONOO induced nitrotyrosine of glutathione reductase and consequently prevented the enzyme from ONOO induced damage. Furthermore, hydroquinone suppressed NO production, a cellular pathway for ONOO formation, in lipopolysaccharide-activated RAW264.7 cells via inhibition of inducible NO synthase expression. The inhibitory effect by hydroquinone seems to be mediated by interruption of lipopolysaccharide-induced signalling such as activation of nuclear factor-kB and extracellular signal-related kinases 1 and 2. The results suggest that hydroquinone may potently modulate reactivity of ONOO and may therefore be a useful agent against ONOO mediated diseases.