The antimalarial trioxanes, exemplified by the naturally occurring sesquiterpene lactone artemisinin and its semi-synthetic derivatives, contain an endoperoxide pharmacophore that lends tremendous potency against Plasmodium parasites. Despite decades of research, their mechanism of action remains unresolved. A leading model of anti-plasmodial activity hypothesizes that iron-mediated cleavage of the endoperoxide bridge generates cytotoxic drug metabolites capable of damaging cellular macromolecules. To probe the malarial targets of the endoperoxide drugs, we studied the distribution of fluorescent dansyl trioxane derivatives in living, intraerythrocytic-stage Plasmodium falciparum parasites using microscopic imaging. The fluorescent trioxanes rapidly accumulated in parasitized erythrocytes, localizing within digestive vacuole-associated neutral lipid bodies of trophozoites and schizonts, and surrounding the developing merozoite membranes. Artemisinin pre-treatment significantly reduced fluorescent labeling of neutral lipid bodies, while iron chelation increased non-specific cytoplasmic localization. To further explore the effects of endoperoxides on cellular lipids, we used an oxidation-sensitive BODIPY lipid probe to show the presence of artemisinin-induced peroxyl radicals in parasite membranes. Lipid extracts from artemisinin-exposed parasites contained increased amounts of free fatty acids and a novel cholesteryl ester. The cellular accumulation patterns and effects on lipids were entirely endoperoxide-dependent, as inactive dioxolane analogs lacking the endoperoxide moiety failed to label neutral lipid bodies or induce oxidative membrane damage. In the parasite digestive vacuole, neutral lipids closely associate with heme and promote hemozoin formation. We propose that the trioxane artemisinin and its derivatives are activated by heme-iron within the neutral lipid environment where they initiate oxidation reactions that damage parasite membranes.