During inflammation, myeloperoxidase (MPO) released by circulating leukocytes accumulates within the subendothelial matrix by binding to and transcytosing the vascular endothelium. Oxidative reactions catalyzed by subendothelial-localized MPO are implicated as a cause of endothelial dysfunction in vascular disease. While the subendothelial matrix is a key target for MPO-derived oxidants during disease, the implications of this damage for endothelial morphology and signaling are largely unknown. We found that endothelial-transcytosed MPO produced hypochlorous acid (HOCl) that reacted locally with the subendothelial matrix and induced covalent cross-linking of the adhesive matrix protein fibronectin. Real-time biosensor and live cell imaging studies revealed that HOCl-mediated matrix oxidation triggered rapid membrane retraction from the substratum and adjacent cells (de-adhesion). De-adhesion was linked with the alteration of Tyr-118 phosphorylation of paxillin, a key adhesion-dependent signaling process, as well as Rho kinase-dependent myosin light chain-2 phosphorylation. De-adhesion dynamics were dependent on the contractile state of cells, with myosin II inhibition with blebbistatin attenuating the rate of membrane retraction. Rho kinase inhibition with Y-27632 also conferred protection, but not during the initial phase of membrane retraction, which was driven by pre-existing actomyosin tensile stress. Notably, diversion of MPO from HOCl production by thiocyanate or nitrite attenuated de-adhesion and associated signaling responses, despite the latter substrate supporting MPO-catalyzed fibronectin nitration. These data show that subendothelial-localized MPO employs a novel “outside-in” mode of redox signaling, involving HOCl-mediated matrix oxidation. These MPO-catalyzed oxidative events are likely to play a previously unrecognized role in altering endothelial integrity and signaling during inflammatory vascular disorders.