A thioredoxin reductase (TrxR), named here TrxR2, that did not react with antibodies to the previously identified TrxR (now named TrxR1) was purified from rat liver. Like TrxR1, TrxR2 existed as a dimer under nondenaturing conditions and contained selenocysteine (Secys) as the penultimate residue in a Gly-Cys-Secys-Gly motif at the COOH-terminus. Analysis with a sulfhydryl-modifying reagent indicated that the Secys residue is essential for TrxR2 activity. A cDNA encoding TrxR2 was cloned from rat liver; the open reading frame predicts a polypeptide of 526 amino acids with a COOH-terminal Gly-Cys-Secys-Gly motif provided that an in-frame TGA codon encodes Secys. The 3' untranslated region of the cDNA contains a canonical Secys insertion sequence element. The deduced amino acid sequence of TrxR2 shows 54% identity (62% similarity) to that of TrxR1. The deduced sequence contained 36 additional residues upstream of the experimentally determined NH2-terminal sequence of purified TrxR2. The sequence of this 36-residue region is typical of that of a mitochondrial leader peptide. Indeed, immunoblot analysis indicated that TrxR2 is localized almost exclusively in mitochondria, whereas TrxR1 is a cytosolic protein. Unlike TrxR1, which was expressed at a level of 0.6 to1.6 ?g per milligram of total soluble protein in all rat tissues examined, TrxR2 was relatively abundant (0.3 to 0.6 ?g/mg) only in liver, kidney, adrenal gland, and heart.The specific localization of TrxR2 in mitochondria, together with the previous identification of mitochondria-specific thioredoxin and thioredoxin-dependent peroxidase, suggest that these three proteins provide a primary line of defense against H2O2 produced by the mitochondrial respiratory chain.