Grx5 is a yeast mitochondrial protein involved in iron-sulfur biogenesis that belongs to a recently described family of monothiolic glutaredoxin-like proteins. No member of this family has been biochemically characterized previously. Grx5 contains a conserved cysteine residue (Cys-60) and a non-conserved one (Cys-117). In this work, we have purified wild type and mutant C60S and C117S proteins and characterized their biochemical properties. A redox potential of -175 mV was calculated for wild type Grx5. The pKa values obtained by titration of mutant proteins with iodoacetamide at different pHs were 5.0 for Cys-60 and 8.2 for Cys-117. When Grx5 was incubated with glutathione disulfide, a transient mixed disulfide was formed between glutathione and the cystein 60 of the protein because of its low pKa. Binding of glutathione to Cys-60 promoted a decrease in the Cys-117 pKa value that triggered the formation of a disulfide bond between both cysteine residues of the protein, indicating that Cys-117 plays an essential role in the catalytic mechanism of Grx5. The disulfide bond in Grx5 could be reduced by GSH but at a rate at least 20 times slower than that observed for the reduction of glutaredoxin 1 from E. coli, a dithiolic glutaredoxin. This slow reduction rate could suggest that GSH may not be the physiologic reducing agent of Grx5. The fact that wild type Grx5 efficiently reduced a glutathiolated protein used as a substrate indicated that Grx5 may act as a thiol reductase inside the mitochondria.