Maintenance of redox homeostasis is critical for the survival of all aerobic organisms. In the budding yeast Saccharomyces cerevisiae, as in other eukaryotes, reactive oxygen species (ROS) are generated during metabolism and upon exposure to environmental stresses. The abnormal production of ROS triggers defense mechanisms to avoid the deleterious consequence of ROS accumulation. Here, we show that the Rho1 GTPase is necessary to confer resistance to oxidants in budding yeast. Temperature-sensitive rho1 mutants (rho1(ts)) are hypersensitive to oxidants and exhibit high accumulation of ROS even at a semipermissive temperature. Rho1 associates with Ycf1, a vacuolar glutathione S-conjugate transporter, which is important for heavy metal detoxification in yeast. Rho1 and Ycf1 exhibit a two-hybrid interaction with each other and form a bimolecular fluorescent complex on the vacuolar membrane. A fluorescent-based complementation assay suggests that the GTP-bound Rho1 associates with Ycf1 and that their interaction is enhanced upon exposure to hydrogen peroxide. The rho1(ts) mutants also exhibit hypersensitivity to cadmium, while cells carrying a deletion of YCF1 or mutations in a component of the Pkc1-MAP kinase pathway exhibit little or minor sensitivity to oxidants. We thus propose that Rho1 protects yeast cells from oxidative stress by regulating multiple downstream targets including Ycf1. Since both Rho1 and Ycf1 belong to highly conserved families of proteins, similar mechanisms may exist in other eukaryotes.