We recently identified a series of transforming growth factor-beta-responsive genes in A549 human adenocarcinoma cell line by a gene trap screening method. Here we report the molecular cloning and characterization of one of these genes, designated TMX, that encodes a novel protein of 280 amino acid residues. The TMX protein possesses an N-terminal signal peptide followed by one thioredoxin (Trx)-like domain with a unique active site sequence, Cys-Pro-Ala-Cys, and a potential transmembrane domain. There are putative TMX homologs with identical active site sequences in the Caenorhabditis elegans and Drosophila genomes. Using recombinant proteins expressed in Escherichia coli, we demonstrated the activity of the Trx domain of TMX to cleave the interchain disulfide bridges in insulin in vitro. The TMX transcript is widely expressed in normal human tissues, and subcellular fractionation and immunostaining for an epitope-tagged TMX protein suggest that TMX is predominantly localized in the endoplasmic reticulum (ER). When TMX was expressed in HEK293 cells, it significantly suppressed the apoptosis induced by brefeldin A, an inhibitor of ER-Golgi transport. This activity was abolished when two Cys residues in the active site sequence were mutated to Ser, suggesting that the Trx-like activity of TMX may help relieve ER stress caused by brefeldin A.