1-cys peroxiredoxin (1-cysPrx), a member of the peroxiredoxin superfamily, can protect cells against membrane oxidation through glutathione (GSH)-dependent reduction of phospholipid hydroperoxides to corresponding alcohols. However, purified native or recombinant enzyme in vitro generally lacks GSH peroxidase (GPx) activity because of oxidation of its single conserved cysteine. Reduction of the resultant oxidized cysteine is difficult because of its protected location within the homodimer formed by the oxidized protein monomers. Partial purification of 1-cysPrx from bovine lung revealed the presence of pi GST in an active preparation, while purification to homogeneity yielded enzyme that inactivated with time. We show that heterodimerization of 1-cysPrx with GSH-saturated pi GST results in glutathionylation of the oxidized cysteine in 1-cysPrx followed by subsequent spontaneous reduction of the mixed disulfide and restoration of enzymatic activity. Maximum activation of 1-cysPrx occurred with a 1:1 molar ratio of GSH-saturated pi GST and a 2:1 molar ratio of GSH to 1-cysPrx. Liposome-mediated delivery of oxidized recombinant enzyme into NCI-H441 cells that lack 1-cysPrx but express pi GST resulted in 1-cysPrx activation, whereas activation in MCF7 cells required co-delivery of pi GST. Our data indicate a physiological mechanism for glutathionylation of the oxidized catalytic cysteine of 1-cysPrx by its heterodimerization with pi GST followed by its GSH-mediated reduction and enzyme activation.