In this study, we characterized a putative peroxidase Prx1 of Candida albicans by: 1) demonstrating the thioredoxin-linked peroxidase activity with purified proteins, 2) examining the sensitivity to several oxidants and the accumulation of intracellular reactive oxygen species with a null mutant (prx1Δ), a mutant (C69S) with a point mutation at Cys69, and a revertant, and 3) subcelluar localization. Enzymatic assays showed that Prx1 is a thioredoxin-linked peroxidase which reduces both hydrogen peroxide (H(2)O(2)) and tert-butyl hydroperoxide (t-BOOH). Compared with two other strong H(2)O(2) scavenger mutants for TSA1 and CAT1, prx1Δ and C69S were less sensitive to H(2)O(2), menadione and diamide at all concentrations tested, but were more sensitive to low concentration of t-BOOH. Intracellular reactive oxygen species accumulated in prx1Δ and C69S cells treated with t-BOOH but not H(2)O(2). These results suggest that peroxidase activity of Prx1 is specified to t-BOOH in cells. In both biochemical and physiological cases, the evolutionarily conserved Cys69 was found to be essential for the function. Immunocytochemical staining revealed Prx1 is localized in the cytosol of yeast cells, but is translocated to the nucleus during the hyphal transition, though the significances of this observation are unclear. Our data suggest that PRX1 has a thioredoxin peroxidase activity reducing both t-BOOH and H(2)O(2), but its cellular function is specified to t-BOOH.