During systemic inflammation, indoleamine 2,3-dioxygenase 1 (IDO1) becomes expressed in endothelial cells where it uses hydrogen peroxide (H2O2) to oxidize L-tryptophan to the tricyclic hydroperoxide, cis-WOOH, that then relaxes arteries via oxidation of protein kinase G 1α. Here we show that arterial glutathione peroxidases and peroxiredoxins that rapidly eliminate H2O2, have little impact on relaxation of IDO1-expressing arteries, and that purified IDO1 forms cis-WOOH in the presence of peroxiredoxin 2. cis-WOOH oxidizes protein thiols in a selective and stereospecific manner. Compared with its epimer trans-WOOH and H2O2, cis-WOOH reacts slower with the major arterial forms of glutathione peroxidases and peroxiredoxins while it reacts more readily with its target, protein kinase G 1α. Our results indicate a paradigm of redox signaling by H2O2 via its enzymatic conversion to an amino acid-derived hydroperoxide that ‘escapes’ effective reductive inactivation to engage in selective oxidative activation of key target proteins.