Compound III (oxyperoxidase) of lignin peroxidase isozyme H8 (pI = 3.5) is formed by either reduction of native ferric enzyme (to ferrous) followed by the reaction with dioxygen or by the addition of excess hydrogen peroxide to resting enzyme. When prepared from the ferrous enzyme, Compound III is stable for days. When formed from excess hydrogen peroxide, the enzyme is rapidly inactivated. However, if the hydrogen peroxide is removed by gel filtration, the resulting Compound III exhibits the same stability as when prepared from ferrous enzyme. Compound III of lignin peroxidase is also relatively unreactive to reducing substrates. Addition of veratryl alcohol to Compound III does not result in any reaction. However, when only 1 equivalent of hydrogen peroxide is added to Compound III in the presence of veratryl alcohol, Compound III is converted to resting enzyme and veratraldehyde formation is detected spectroscopically.