Increasing the polyunsaturated fatty acid (PUFA) composition of milk is acknowledged to be of benefit to consumer health. Despite the high PUFA content of forages, milk fat contains only about 3% of PUFA and only about 0.5% of n-3 fatty acids. This is mainly due to intensive lipid metabolism in the rumen (lipolysis and biohydrogenation) and during conservation (lipolysis and oxidation) such as drying (hay) and ensiling (silage). In red clover, polyphenol oxidase (PPO) has been suggested to protect lipids against degradation, both in the silage as well as in the rumen, leading to a higher output of PUFA in ruminant products (meat and milk). PPO mediates the oxidation of phenols and diphenols to quinones, which will readily react with nucleophilic binding sites. Such binding sites can be found on proteins, resulting in the formation of protein-bound phenols. This review summarizes the different methods that have been used to assess PPO activity in red clover, and an overview on the current understanding of PPO activity and activation in red clover. Knowledge on these aspects is of major importance to fully harness PPO’s lipid-protecting role. Furthermore, we review the studies that evidence PPO-mediated lipid protection and discuss its possible importance in lab-scale silages and further in an in vitro rumen system. It is demonstrated that high (induction of) PPO activity can lead to lower lipolysis in the silage and lower biohydrogenation in the rumen. There are three hypotheses on its working mechanism: (i) protein-bound phenols could directly bind to enzymes (e.g. lipases) as such inhibiting them; (ii) binding of quinones in and between proteins embedded in a lipid membrane (e.g. in the chloroplast) could lead to encapsulation of the lipids; (iii) direct binding of quinones to nucleophilic sites in polar lipids also could lead to protection. There is no exclusive evidence on which mechanism is most important, although there are strong indications that only lipid encapsulation in protein–phenol complexes would lead to an effective protection of lipids against ruminal biohydrogenation. From several studies it has also become apparent that the degree of PPO activation could influence the mode and degree of protection. In conclusion, this review demonstrates that protein-bound phenols and encapsulation in protein–phenol complexes, induced by PPO-mediated diphenol oxidation, could be of interest when aiming to protect lipids against pre-ruminal and ruminal degradation.