Ferredoxins are iron-sulfur proteins that play important roles in electron transport and redox homeostasis. Yeast Apd1p is a novel member of the family of thioredoxin-like ferredoxins. In this study, we characterized the hydroxyurea (HU)-hypersensitive phenotype of apd1Δ cells. HU is an inhibitor of DNA synthesis, a cellular stressor and an anticancer agent. Although the loss of APD1 did not influence cell proliferation or cell cycle progression, it resulted in HU sensitivity. This sensitivity was reverted in the presence of antioxidant N-acetyl-cysteine, implicating a role for intracellular redox. Mutation of the iron-binding motifs in Apd1p abrogated its ability to rescue HU sensitivity in apd1Δ cells. The iron-binding activity of Apd1p was verified by a color assay. By mass spectrometry two irons were found to be incorporated into one Apd1p protein molecule. Surprisingly, ribonucleotide reductase genes were not induced in apd1Δ cells and the HU sensitivity was unaffected when dNTP production was boosted. A suppressor screen was performed and the expression of stress-regulated transcription factor Yap1p was found to effectively rescue the HU sensitivity in apd1Δ cells. Taken together, our work identified Apd1p as a new ferredoxin which serves critical roles in cellular defense against HU.