Myeloperoxidase (MPO) and paraoxonase 1 (PON1) are high-density lipoprotein-associated (HDL-associated) proteins mechanistically linked to inflammation, oxidant stress, and atherosclerosis. MPO is a source of ROS during inflammation and can oxidize apolipoprotein A1 (APOA1) of HDL, impairing its atheroprotective functions. In contrast, PON1 fosters systemic antioxidant effects and promotes some of the atheroprotective properties attributed to HDL. Here, we demonstrate that MPO, PON1, and HDL bind to one another, forming a ternary complex, wherein PON1 partially inhibits MPO activity, while MPO inactivates PON1. MPO oxidizes PON1 on tyrosine 71 (Tyr71), a modified residue found in human atheroma that is critical for HDL binding and PON1 function. Acute inflammation model studies with transgenic and knockout mice for either PON1 or MPO confirmed that MPO and PON1 reciprocally modulate each other's function in vivo. Further structure and function studies identified critical contact sites between APOA1 within HDL, PON1, and MPO, and proteomics studies of HDL recovered from acute coronary syndrome (ACS) subjects revealed enhanced chlorotyrosine content, site-specific PON1 methionine oxidation, and reduced PON1 activity. HDL thus serves as a scaffold upon which MPO and PON1 interact during inflammation, whereupon PON1 binding partially inhibits MPO activity, and MPO promotes site-specific oxidative modification and impairment of PON1 and APOA1 function.