Insertion of selenocysteine (Sec) into protein scaffolds provides an opportunity for designing enzymes with improved and unusual catalytic properties. The use of a common thioredoxin fold with a high affinity for glutathione in glutaredoxin (Grx) and glutathione peroxidase (GPx) suggests a possibility of engineering Grx into GPx and vice versa. Here, we engineered a Grx domain of mouse thioredoxin/glutathione reductase (TGR) into a selenium-containing enzyme by substituting the active site cysteine (Cys) with selenocysteine (Sec) in a Cys auxotrophic system. The resulting selenoenzyme displayed an unusually high GPx catalytic activity rivaling that of several native GPxs. The engineered seleno-Grx was characterized by mass spectrometry and kinetic analyses. It showed a typical ping-pong kinetic mechanism, and its catalytic properties were similar to those of naturally occurring GPxs. For example, its second rate constant (k(cat)/K(mH2O2)) was as high as 1.55x10(7) M(-1) min(-1). It appears that glutathione-dependent Grx, GPx and glutathione transferase (GST) evolved from a common thioredoxin-like ancestor to accommodate related glutathione-dependent functions and can be interconverted by targeted Sec insertion.