Increase in reactive oxygen species plays an integral part in the inflammatory response, and chronic inflammation increases cancer risk. Selenium-dependent glutathione peroxidase (GPX) is well recognized for its antioxidant, and thus anti-inflammatory, activity. However, due to the multiple antioxidant families present in the gastrointestinal tract, it has been difficult to demonstrate the importance of individual antioxidant enzymes. Using genetically altered mice deficient in individual Gpx genes has provided insight into the physiological functions of these genes. Insufficient GPX activity in the mucosal epithelium can trigger acute and chronic inflammation. The presence of certain microflora, such as Helicobacter species, may affect cancer risk significantly. However, when damaged cells have progressed into a precancerous status, increased GPX activity may become procarcinogenic, presumably due to inhibition of hydroperoxide-mediated apoptosis. This review summarizes the current view of GPX in inflammation and cancer with emphasis on the GI tract.