Nitric oxide (NO) is a free radical product of cell metabolism that plays diverse and important roles in the regulation of cellular function. S-Nitrosylation is emerging as a specific and fundamental posttranslational protein modification for the transduction of NO bioactivity, but very little is known about its physiological functions in plants. We investigated the molecular mechanism for S-nitrosylation of peroxiredoxin II E (PrxII E) from Arabidopsis thaliana and found that this posttranslational modification inhibits the hydroperoxide-reducing peroxidase activity of PrxII E, thus revealing a novel regulatory mechanism for peroxiredoxins. Furthermore, we obtained biochemical and genetic evidence that PrxII E functions in detoxifying peroxynitrite (ONOO-), a potent oxidizing and nitrating species formed in a diffusion-limited reaction between NO and O2- that can interfere with Tyr kinase signaling through the nitration of Tyr residues. S-Nitrosylation also inhibits the ONOO- detoxification activity of PrxII E, causing a dramatic increase of ONOO--dependent nitrotyrosine residue formation. The same increase was observed in a prxII E mutant line after exposure to ONOO-, indicating that the PrxII E modulation of ONOO- bioactivity is biologically relevant. We conclude that NO regulates the effects of its own radicals through the S-nitrosylation of crucial components of the antioxidant defense system that function as common triggers for reactive oxygen species- and NO-mediated signaling events.