The Saccharomyces cerevisiae transcription factor Yap1 is a central determinant of oxidative stress tolerance. This protein is found primarily in the cytoplasm in the absence of oxidative stress but, upon exposure to oxidants, rapidly translocates to the nucleus and activates expression of target genes. Although both diamide and H(2)O(2) have been used to impose oxidative stress on cells, these different oxidants trigger Yap1 nuclear localization in distinctly different ways. Diamide appears to oxidize particular cysteine residues on Yap1, leading to inhibition of association of Yap1 with the nuclear exportin Crm1. Crm1 would normally transport Yap1 out of the nucleus. H(2)O(2) activation of Yap1 nuclear localization requires the participation of the glutathione peroxidase Gpx3 and the Yap1-binding protein Ybp1. H(2)O(2) exposure triggers formation of a dual disulfide bonded Yap1 that is catalyzed by the presence of Gpx3 and Ybp1. In the current study, we have determined that two distinct pools of Yap1 exist in the cell. These pools are designated by the level of Ybp1. Ybp1 interacts directly with Yap1 and these proteins form a stable complex in vivo. Genetic and biochemical experiments indicate that Ybp1 is rate-limiting for Yap1 oxidative folding during H(2)O(2) stress. The fungal pathogen Candida glabrata expresses a protein homologous to Ybp1 called CgYbp1. Overproduction of CgYbp1 elevated H(2)O(2) tolerance in this pathogen indicating that the determinative role of Ybp1 in setting the level of H(2)O(2) resistance has been evolutionarily conserved.