Reactive oxygen species are generated by various biological systems, including NADPH oxidases, xanthine oxidoreductase, and mitochondrial respiratory enzymes, and contribute to many physiological and pathological phenomena. Mammalian xanthine dehydrogenase (XDH) can be converted to xanthine oxidase (XO), which produces both superoxide anion and hydrogen peroxide. Recent X-ray crystallographic and site-directed mutagenesis studies have revealed a highly sophisticated mechanism of conversion from XDH to XO, suggesting that the conversion is not a simple artefact, but rather has a function in mammalian organisms. Furthermore, this transition seems to involve a thermodynamic equilibrium between XDH and XO; disulfide bond formation or proteolysis can then lock the enzyme in the XO form. In this review, we focus on recent advances in our understanding of the mechanism of conversion from XDH to XO.