Glutathione (GSH) is an abundant cellular thiol which has been implicated in many cellular processes including protection against xenobiotics, carcinogens and free radicals. Utilization of GSH in both enzymic and non-enzymic defence mechanisms results in its conversion to the oxidized form (GSSG), and it must be recycled to GSH to maintain the high intracellular ratio of GSH to GSSG. Glutathione reductase (GLR) is a flavoenzyme, which catalyses reduction of GSSG to GSH using the reducing power of NADPH. We show that yeast mutants deleted for GLR1, encoding glutathione reductase, lack GLR activity and accumulate increased levels of GSSG. In addition, the glr1 mutant strain was unaffected in the inducible adaptive response to hydrogen peroxide, but showed increased sensitivity to oxidants including both peroxides and superoxide, indicating a requirement for GLR in protection against oxidative stress. Furthermore, GLR1 expression was elevated two to threefold in the presence of oxidants, and regulation was dependent upon the yAP-1 transcriptional activator protein. Thus, GLR1 is one of a growing number of genes involved in the protection of yeast cells against oxidative stress and regulated by yAP-1.