Redox fluctuations within cells can be detrimental to cell function. To gain insight into how cells normally buffer against redox changes to maintain cell function, we have focused on elucidating the signaling pathways that serve to sense and respond to oxidative redox stress within the endoplasmic reticulum (ER) using yeast as a model system. Previously, we have shown that a cysteine in the molecular chaperone BiP, a Hsp70 molecular chaperone within the ER, is susceptible to oxidation by peroxide during ER-derived oxidative stress, forming a sulfenic acid (؊SOH) moiety. Here, we demonstrate that this same conserved BiP cysteine is susceptible also to glutathione modification (؊SSG). Glutathionylated BiP is detected both as a consequence of enhanced levels of cellular peroxide and also as a by-product of increased levels of oxidized glutathione (GSSG). Similar to sulfenylation, we observe glutathionylation decouples BiP ATPase and peptide binding activities, turning BiP from an ATP-dependent foldase into an ATP-independent holdase. We show glutathionylation enhances cell proliferation during oxidative stress, which we suggest relates to modified BiP's increased ability to limit polypeptide aggregation. We propose the susceptibility of BiP to modification with glutathione may serve also to prevent irreversible oxidation of BiP by peroxide.Cell homeostasis and numerous vital cell functions rely on the maintenance of a proper intracellular redox balance. Oxidative folding in the endoplasmic reticulum (ER) 2 is one intracellular system that is prone to disruption upon alterations in the redox poise. Insufficient oxidizing capacity in the ER leads to the accumulation of proteins in reduced non-native states (1, 2). Alternatively, an overly oxidizing ER results in cellular toxicity, likely caused in part by the mis-pairing of protein cysteine residues resulting from a decreased capacity to reduce nonnative disulfides (3, 4). Crucial for maintaining a continual flux of folding polypeptides through the ER are the systems that buffer against fluctuations in the ER redox environment.Recently, several proteins have been demonstrated to act as sensors of redox fluctuations in the ER. In a common theme, these proteins sense changes in the ER redox environment and respond with beneficial alterations in their enzymatic activities. The enzyme Ero1 is a major source of oxidizing equivalents in the ER, and Ero1 activity is coupled to the ER redox environment. When the ER balance shifts to overly oxidizing conditions, regulatory cysteine residues in Ero1 become oxidized to disulfides, which decreases Ero1 oxidase activity to help restore redox balance (5-7). In addition, sensors that cope with the potential for protein folding defects have emerged. These redox-dependent chaperones do not directly impact the flux of oxidizing equivalents, like Ero1, but rather are activated to help limit polypeptide aggregation during unfavorable redox conditions. Oxidation of active site cysteines in the oxidoreductase PDI has been demonstrated to...