The ligand-exchange reactions between molybdenum dialkyldithiocarbamate, Mo(dtc)2, and zinc dialkyldithiophosphate, Zn(dtp)2, have been investigated during inhibited oxidation in a model hydrocarbon (hexadecane) and in a series of Group I-IV base oils at 160°C. These investigations revealed that the ligand exchange leads to formation of single-exchange products, Mo(dtc)(dtp) and Zn(dtp)(dtc), and double-exchange products, Mo(dtp)2 and Zn(dtc)2, and that the extent of the exchange is significantly affected by oxidation and inhibition reactions involving the original additives, the ligand-exchange products, the base oil, and base oil-derived oxidation products. It is concluded that there are two reaction sequences that control the product distribution and additive consumption during oxidation in different base oils. The first sequence involves the formation of peroxy radicals and hydroperoxides, and the decomposition of hydroperoxides by Zn(dtp)2 and Zn(dtp)(dtc). One of the most important factors affecting this sequence is the base oil oxidisability. The second sequence involves inhibition of oxidation by peroxy radical-trapping antioxidants naturally present in or added to the oil, or formed during the oxidation. Zn(dtc)2 and Zn(dtp)(dtc) appear to be very effective in this respect and are, therefore, preferentially consumed. This preferential consumption shifts the ligand-exchange equilibrium towards the formation of Mo(dtc)(dtp) and Mo(dtp)2. The combined effect of the two sequences depends on base oil properties. The first sequence predominates in base oils exhibiting high oxidisability (e.g., in Group I oils) and the second in paraffinic oils, such as Group III and IV oils, having low oxidisability and no sulphur or aromatics. The retention of friction-reducing capability with the Mo(dtc)2/Zn(dtp)2 additive system during oxidation appears to be tied to the first sequence, which leads to consumption of Zn(dtp)2, since the friction of Zn(dtp)2, since the friction-reducing capability ceases when Zn(dtp)2 is consumed and hydroperoxides can accumulate in the system. Consequently, the best retention of friction-reducing capability is achieved in base oils with low oxidisability.