Glutaredoxins (Grxs) are small, ubiquitous, multi-functional proteins present in different compartments of plant cells. A chloroplast targeted class I GRX (CcGRXS12) gene was isolated from Capsicum chinense during the pepper mild mottle virus (PMMoV) infection. Functional characterization of the gene was performed in N. benthamiana transgenic plants transformed with native C. chinense GRX (Nb:GRX), GRX-fused with GFP (Nb:GRX-GFP) and GRX truncated for the chloroplast targeting sequences but fused with GFP (Nb:Δ2MGRX-GFP). Over-expression of CcGRXS12 inhibits the PMMoV-I accumulation at late stage of infection and is accompanied with the activation of SA- pathway pathogenesis related (PR) transcripts, and suppression of JA/ET- pathway transcripts. Further the reduced accumulation of auxin-induced Glutathione-S-Transferase (pCNT103) in CcGRXS12 over expressing lines indicates that the protein could able to protect the plants from the oxidative stress caused by the virus. PMMoV-I infection increases accumulation of pyridine nucleotides (PNs) mainly due to the reduced form of PNs (NAD(P)H) and it was higher in Nb:GRX-GFP lines compared to other lines where infection is limited. Apart from biotic stress, CcGRXS12 protects the plants from abiotic stress conditions caused by H2O2 and herbicide paraquat. CcGRXS12 exhibits GSH-disulphide oxidoreductase activity in vitro however devoid of complementary Fe-S cluster assembly mechanism in yeast.