Peroxynitrite is a short-lived and reactive biological oxidant formed from the diffusion-controlled reaction of the free radicals superoxide (O2 •–) and nitric oxide (•NO). In this review, we first analyze the biochemical evidence for the formation of peroxynitrite in vivo and the reactions that lead to it. Then, we describe the principal reactions that peroxynitrite undergoes with biological targets and provide kinetic and mechanistic details. In these reactions, peroxynitrite has roles as (1) peroxide, (2) Lewis base, and (3) free radical generator. Physiological levels of CO2 can change the outcome of peroxynitrite reactions. The second part of the review assesses the formation of protein 3-nitrotyrosine (NO2Tyr) by peroxynitrite-dependent and -independent mechanisms, as one of the hallmarks of the actions of •NO-derived oxidants in biological systems. Moreover, tyrosine nitration impacts protein structure and function, tyrosine kinase signal transduction cascades and protein turnover. Overall, the review is aimed to provide an integrated biochemical view on the formation and reactions of peroxynitrite under biologically relevant conditions and the impact of this stealthy oxidant and one of its major footprints, protein NO2Tyr, in the disruption of cellular homeostasis.