Saccharomyces cerevisiae is able to use some fatty acids, such as oleic acid, as a sole source of carbon. β-oxidation, which occurs in a single membrane-enveloped organelle or peroxisome, is responsible for the assimilation of fatty acids. In S. cerevisiae, β-oxidation occurs only in peroxisomes, and H(2)O(2) is generated during this fatty acid-metabolizing pathway. S. cerevisiae has three GPX genes (GPX1, GPX2, and GPX3) encoding atypical 2-Cys peroxiredoxins. Here we show that expression of GPX1 was induced in medium containing oleic acid as a carbon source in an Msn2/Msn4-dependent manner. We found that Gpx1 was located in the peroxisomal matrix. The peroxisomal Gpx1 showed peroxidase activity using thioredoxin or glutathione as a reducing power. Peroxisome biogenesis was induced when cells were cultured with oleic acid. Peroxisome biogenesis was impaired in gpx1∆ cells, and subsequently, the growth of gpx1∆ cells was lowered in oleic acid-containing medium. Gpx1 contains six cysteine residues. Of the cysteine-substituted mutants of Gpx1, Gpx1(C36S) was not able to restore growth and peroxisome formation in oleic acid-containing medium, therefore, redox regulation of Gpx1 seems to be involved in the mechanism of peroxisome formation.