A 25-kDa antioxidant enzyme that provides protection against oxidation systems capable of generating reactive oxygen and sulfur species has previously been identified. The nature of the oxidant eliminated by, and the physiological source of reducing equivalents for, this enzyme, however, were not known. The 25-kDa enzyme is now shown to be a peroxidase that reduces H2O2 and alkyl hydroperoxides with the use of hydrogens provided by thioredoxin, thioredoxin reductase, and NADPH. This protein is the first peroxidase to be identified that uses thioredoxin as the immediate hydrogen donor and is thus named thioredoxin peroxidase (TPx). TPx exists as a dimer of identical 25-kDa subunits that contain 2 cysteine residues, Cys47 and Cys170. Cys47-SH appears to be the site of oxidation by peroxides, and the oxidized Cys47 probably reacts with Cys170-SH of the other subunit to form an intermolecular disulfide. Mutant TPx proteins lacking either Cys47 or Cys170, therefore, do not exhibit thioredoxin-coupled peroxidase activity. The TPx disulfide is specifically reduced by thioredoxin, but can also be reduced (less effectively) by a small molecular size thiol. The Saccharomyces cerevisiae thioredoxin reductase gene was also cloned and sequenced, and the deduced amino sequence was shown to be 51% identical with that of the Escherichia coli enzyme.