The methylotrophic yeast Pichia pastoris can grow on methanol as sole source of carbon and energy. The first reaction in yeast methanol metabolism, catalyzed by an abundant peroxisomal enzyme, alcohol oxidase, generates high levels of H(2)O(2), but the oxidative stress response during methanol metabolism has not been elucidated. In this study, we isolated the Yap1 homolog of P. pastoris (PpYap1) and analyzed the properties of a PpYAP1-disruption strain. The PpYap1 transcription factor is activated after exposure to various reactive agents, and therefore functions as a regulator of the redox system in P. pastoris. We have also identified PpGPX1, the unique glutathione peroxidase-encoding gene in P. pastoris whose expression is induced by PpYap1. PpGpx1, but not the ScTsa1 or SpTpx1 homolog PpTsa1, functions as a H(2)O(2) sensor and activates PpYap1. This study is the first demonstration of a yeast Yap1 family protein activated during conventional metabolism.