Hydrogen peroxide (H2O2) accumulates transiently in various cell types stimulated with peptide growth factors and participates in receptor signaling by oxidizing the essential cysteine residues of protein tyrosine phosphatases and the lipid phosphatase PTEN. The reversible inactivation of these phosphatases by H2O2 is likely required to prevent futile cycles of phosphorylation-dephosphorylation of proteins and phosphoinositides. The accumulation of H2O2 is possible even in the presence of large amounts of the antioxidant enzymes peroxiredoxin I and II in the cytosol, probably because of a built-in mechanism of peroxiredoxin inactivation that is mediated by H2O2 and reversed by an ATP-dependent reduction reaction catalyzed by sulfiredoxin.