Thioredoxin (Trx) is a small ubiquitous protein that displays different functions mainly via redox-mediated processes. We here report the cloning of a gene (trxC) coding for a novel thioredoxin in Escherichia coli as well as the expression and characterization of its product. The gene encodes a protein of 139 amino acids (Trx2) with a calculated molecular mass of 15.5 kDa. Trx2 contains two distinct domains: an N-terminal domain of 32 amino acids including two CXXC motifs and a C-terminal domain, with the conserved active site, Trp-Cys-Gly-Pro-Cys, showing high homology to the prokaryotic thioredoxins. Trx2 together with thioredoxin reductase and NADPH is an efficient electron donor for the essential enzyme ribonucleotide reductase and is also able to reduce the interchain disulfide bridges of insulin. The apparent Km value of Trx2 for thioredoxin reductase is similar to that of the previously characterized E. coli thioredoxin (Trx1). The enzymatic activity of Trx2 as a protein-disulfide reductase is increased by preincubation with dithiothreitol, suggesting that oxidation of cysteine residues other than the ones in the active site might regulate its activity. A truncated form of the protein, lacking the N-terminal domain, is insensitive to the presence of dithiothreitol, further confirming the involvement of the additional cysteine residues in modulating Trx2 activity. In addition, the presence of the N-terminal domain appears to confer heat sensitivity to Trx2, unlike Trx1. Finally, Trx2 is present normally in growing E. coli cells as shown by Western blot analysis.