Glutathiolation has emerged as an important post-translational modification that regulates protein function. Reduced glutathione remains bound to reactive cysteine side chains of several intracellular proteins even under basal conditions and the abundance of glutathiolated proteins increases upon oxidant challenge. Although protein glutathiolation was considered primarily to be a protective mechanism for preventing irreversible oxidation of protein thiols, recent evidence suggests that controlled glutathiolation reactions can also be used to modify protein structure and function. Several growth factors and cytokines promote protein glutathiolation and glutathiolated proteins have been shown to increase upon physiological stimulation of NO production. Given the high affinity of some nitrosylated proteins for glutathione, glutathiolation may also be a significant metabolic fate of nitrosylated proteins. Enzymatic pathways of protein de-glutathiolation have also been described; indicating that both glutathiolation and de-glutathiolation may be tightly regulated processes. In this review, we discuss the mechanisms of protein glutathiolation and how physiologic glutathiolation of specific proteins could regulate glucose metabolism, calcium homeostasis and changes in cell shape and contraction. We propose that glutathiolation represents a discrete sub-state within complex thiol-based redox circuits, relays and switches that regulate protein function basally and, upon oxidative stress, elicit adaptive responses or trigger cell death.