INrf2-Nrf2 proteins are sensors of chemical/radiation stress. Nrf2, in response to stresses, is released from INrf2. Nrf2 is translocated into the nucleus where it binds to the antioxidant response element and coordinately activates the expression of a battery of genes that protect cells against oxidative and electrophilic stress. An autoregulatory loop between INrf2 and Nrf2 regulates their cellular abundance. Nrf2 activates INrf2 gene expression, and INrf2 serves as an adapter for degradation of Nrf2. In this report, we demonstrate that mutation of tyrosine 141 in bric-a-bric, tramtrack, broad complex domain to alanine rendered INrf2 unstable and nonfunctional. INrf2Y141A mutant degraded rapidly as compared with wild type INrf2, although it could dimerize and bind Nrf2. De novo synthesized INrf2 protein was phosphorylated at tyrosine 141. Tyrosine 141-phosphorylated INrf2 was highly stable. Treatment with hydrogen peroxide, which is an oxidizing agent, led to dephosphorylation of INrf2Y141, resulting in rapid degradation of INrf2. This resulted in stabilization of Nrf2 and activation of ARE-mediated gene expression. These results demonstrate that stress-induced dephosphorylation of tyrosine 141 is a novel mechanism in Nrf2 activation and cellular protection.