A thiol/disulfide oxidoreductase component of the GSH system, glutaredoxin (Grx), is involved in the reduction of GSH-based mixed disulfides and participates in a variety of cellular redox pathways. A single cytosolic Grx (Grx1) was previously described in mammals. We now report identification and characterization of a second mammalian Grx, designated Grx2. Grx2 exhibited 36% identity with Grx1 and had a disulfide active center containing the Cys-Ser-Tyr-Cys motif. Grx2 was encoded in the genomes of mammals and birds and expressed in a variety of cell types. The gene for human Grx2 consisted of four exons and three introns, spanned 10 kilobase pairs, and localized to chromosome 1q31.2-31.3. The coding sequence was present in all exons, with the first exon encoding a mitochondrial signal peptide. The mitochondrial leader sequence was also present in mouse and rat Grx2 sequences and was shown to direct either Grx2 or green fluorescent protein to mitochondria. Alternative splicing forms of mammalian Grx2 mRNAs were identified that differed in sequences upstream of exon 2. To functionally characterize the new protein, human and mouse Grx2 proteins were expressed in Escherichia coli, and the purified proteins were shown to reduce mixed disulfides formed between GSH and S-sulfocysteine, hydroxyethyldisulfide, or cystine. Grx1 and Grx2 were sensitive to inactivation by iodoacetamide and H(2)O(2) and exhibited similar pH dependence of catalytic activity. However, H(2)O(2)-inactivated Grx2 could only be reactivated with 5 mm GSH, whereas Grx1 could also be reactivated with dithiothreitol or thioredoxin/thioredoxin reductase. The Grx2 structural model suggested a common reaction mechanism for this class of proteins. The data provide the first example of a mitochondrial Grx and also indicate the occurrence of a second functional Grx in mammals.