Autophagy is a membrane-trafficking process whereby double-membrane vesicles called autophagosomes engulf and deliver intracellular material to the vacuole for degradation. Atg4 is a cysteine protease with an essential function in autophagosome formation. Mounting evidence suggests that reactive oxygen species may play a role in the control of autophagy and could regulate Atg4 activity but the precise mechanisms remain unclear. In this study, we showed that reactive oxygen species activate autophagy in the model yeast Saccharomyces cerevisiae and unraveled the molecular mechanism by which redox balance controls Atg4 activity. A combination of biochemical assays, redox titrations, and site-directed mutagenesis revealed that Atg4 is regulated by oxidoreduction of a single disulfide bond between Cys338 and Cys394. This disulfide has a low redox potential and is very efficiently reduced by thioredoxin, suggesting that this oxidoreductase plays an important role in Atg4 regulation. Accordingly, we found that autophagy activation by rapamycin was more pronounced in a thioredoxin mutant compared with wild-type cells. Moreover, in vivo studies indicated that Cys338 and Cys394 are required for the proper regulation of autophagosome biogenesis, since mutation of these cysteines resulted in increased recruitment of Atg8 to the phagophore assembly site. Thus, we propose that the fine-tuning of Atg4 activity depending on the intracellular redox state may regulate autophagosome formation.