AbstractClass I glutaredoxins are enzymatically active, glutathione-dependent oxidoreductases, whilst class II glutaredoxins are typically enzymatically inactive, Fe-S cluster-binding proteins. Enzymatically active glutaredoxins harbor both a glutathione-scaffold site for reacting with glutathionylated disulfide substrates and a glutathione-activator site for reacting with reduced glutathione. Here, using yeast ScGrx7 as a model protein, we comprehensively identified and characterized key residues from four distinct protein regions, as well as the covalently bound glutathione moiety, and quantified their contribution to both interaction sites. Additionally, we developed a redox-sensitive GFP2-based assay, which allowed the real-time assessment of glutaredoxin structure-function relationships inside living cells. Finally, we employed this assay to rapidly screen multiple glutaredoxin mutants, ultimately enabling us to convert enzymatically active and inactive glutaredoxins into each other. In summary, we have gained a comprehensive understanding of the mechanistic underpinnings of glutaredoxin catalysis and have elucidated the determinant structural differences between the two main classes of glutaredoxins.