Hydrogen peroxide (HO) is produced on stimulation of many cell surface receptors and serves as an intracellular messenger in the regulation of diverse physiological events, mostly by oxidizing cysteine residues of effector proteins. Mammalian cells express multiple HO-eliminating enzymes, including catalase, glutathione peroxidase (GPx), and peroxiredoxin (Prx). A conserved cysteine in Prx family members is the site of oxidation by HO. Peroxiredoxins possess a high-affinity binding site for HO that is lacking in catalase and GPx and which renders the catalytic cysteine highly susceptible to oxidation, with a rate constant several orders of magnitude greater than that for oxidation of cysteine in most HO effector proteins. Moreover, Prxs are abundant and present in all subcellular compartments. The cysteines of most HO effectors are therefore at a competitive disadvantage for reaction with HO. Recent Advances: Here we review intracellular sources of HO as well as HO target proteins classified according to biochemical and cellular function. We then highlight two strategies implemented by cells to overcome the kinetic disadvantage of most target proteins with regard to HO-mediated oxidation: transient inactivation of local Prx molecules via phosphorylation, and indirect oxidation of target cysteines via oxidized Prx. Critical Issues and Future Directions: Recent studies suggest that only a small fraction of the total pools of Prxs and HO effector proteins localized in specific subcellular compartments participates in HO signaling. Development of sensitive tools to selectively detect phosphorylated Prxs and oxidized effector proteins is needed to provide further insight into HO signaling. Antioxid. Redox Signal. 28, 537-557.