Tryparedoxin I (TXNI) and tryparedoxin peroxidase (TXNPx), novel proteins isolated from Crithidia fasciculata, have been reported to reconstitute a trypanothione peroxidase activity in vitro (Nogoceke, E.; Gommel, D. U.; Kiess, M.; Kalisz, H. M.; Flohé, L. Biol. Chem. 378:827-836; 1997). Combined with trypanothione reductase, they may form an NADPH-fueled trypanothione-mediated defense system against hydroperoxides in the trypanosomatids. In situ confocal microscopy of antibody-stained TXNI and TXNPx and electron microscopy of the immunogold labeled proteins revealed their colocalization in the cytosol. Insignificant amounts of the enzymes were detected in the nucleus and vesicular structures, whereas the kinetoplast and the mitochondrion are virtually free of any label. Comparison of the PCR product sequences obtained with genomic and cDNA templates rules out any editing typical of kinetoplast mRNA. Sequence similarities with any of the established maxicircle genes of trypanosomatids were not detectable. It is concluded that both, TXNI as well as TXNPx are encoded by nuclear DNA and predominantly, if not exclusively localized in the cytosol. Working in concert with trypanothione reductase, they can function as an enzymatic system that reduces hydroperoxides at the expense of NADPH without any impairment of the flux of reduction equivalents by cellular compartmentation.