Lipid peroxidation is a process which is key in cell signaling and disease, it is exploited in cancer therapy in the form of photodynamic therapy. The appearance of hydrophilic moieties within the bilayer's hydrocarbon core will dramatically alter the structure and mechanical behavior of membranes. Here, we combine viscosity sensitive fluorophores, advanced microscopy, and X-ray diffraction and molecular simulations to directly and quantitatively measure the bilayer's structural and viscoelastic properties, and correlate these with atomistic molecular modelling. Our results indicate an increase in microviscosity and a decrease in the bending rigidity upon peroxidation of the membranes, contrary to the trend observed with non-oxidized lipids. Fluorescence lifetime imaging microscopy and MD simulations give evidence for the presence of membrane regions of different local order in the oxidized membranes. We hypothesize that oxidation promotes stronger lipid-lipid interactions, which lead to an increase in the lateral heterogeneity within the bilayer and the creation of lipid clusters of higher order.