The majority of secreted and outer membrane eukaryotic proteins contain disulfide bonds, formed by complex interdependent pathways in the endoplasmic reticulum. The current model for the major route of disulfide formation is the regulated flow of oxidizing equivalents from molecular oxygen to the membrane-associated enzyme Ero1 to protein disulfide isomerase, and hence to substrate proteins. One molecule of hydrogen peroxide is produced by Ero1 per disulfide bond made. This peroxide is usually considered to be a dangerous by-product. Here we show that peroxide, added to a refolding buffer or generated enzymatically in situ, results in the efficient refolding of a model protein to the native state. At pH 7.0, the kinetics of obtaining the native folded state are more efficient using peroxide than by the use of a glutathione redox buffer. Disulfide bond formation by peroxide is kinetically favored over oxidation of cysteine to cysteine sulfinic acid and over the oxidation of other amino acids in the proteins such as methionine. Hence, unless peroxides are added in excess, oxidative damage to the folding protein is minimal. Our results offer insights into potential mechanisms for disulfide bond formation in vivo.