The antioxidant activities of aqueous phase β-lactoglobulin (β-Lg) and its chymotryptic hydrolysates (CTH) were compared in this study. Proteins and peptides have been shown to inhibit lipid oxidation reactions in oil-in-water emulsions; however, a more fundamental understanding of the antioxidant activity of these compounds in dispersed food lipid systems is lacking. CTH was more effective than an equivalent concentration of β-Lg in retarding lipid oxidation reactions when dispersed in the continuous phase of Brij-stabilized oil-in-water emulsions (pH 7). Furthermore, it was observed that CTH had higher peroxyl radical scavenging and iron-binding values than β-Lg. Liquid chromatography−mass spectrometry (LC-MS) was used to measure the rate of oxidation of three oxidatively labile amino acid residues (Tyr, Met, and Phe) in certain CTH peptide fragments. Significant oxidation of specific Tyr and Met residues present in two separate 12 amino acid peptide fragments was observed in the days preceding lipid oxidation (39 and 55% of Tyr and Met were oxidized, respectively, by day 4 of the study); however, no significant oxidation of the Phe residue present in a specific 14 amino acid peptide fragment could be observed during the same time period. These data could suggest that Met and Tyr residues are capable of scavenging radical species and have the potential to improve the oxidative stability dispersed food lipids.