We have characterized the properties and putative role of a mammalian thioredoxin-like protein, ERp16 (previously designated ERp18, ERp19, or hTLP19). The predicted amino acid sequence of the 172-residue human protein contains an NH2-terminal signal peptide, a thioredoxin-like domain with an active site motif (CGAC), and a COOH-terminal endoplasmic reticulum (ER) retention sequence (EDEL). Analyses indicated that the mature protein (comprising 146 residues) is generated by cleavage of the 26-residue signal peptide and is localized in the lumen of the ER. Biochemical experiments with the recombinant mature protein revealed it to be a thioldisulfide oxidoreductase. Its redox potential was about -165 mV; its active site cysteine residue Cys66 was nucleophilic with a pKa value of ∼6.6; it catalyzed the formation, reduction, and isomerization of disulfide bonds, with the unusual CGAC active site motif being responsible for these activities; and it existed as a dimer and underwent a redox-dependent conformational change. The observations that the redox potential of ERp16 (-165 mV) was within the range of that of the ER (-135 to -185 mV) and that ERp16 catalyzed disulfide isomerization of scrambled ribonuclease A suggest a role for ERp16 in protein disulfide isomerization in the ER. Expression of ERp16 in HeLa cells inhibited the induction of apoptosis by agents that elicit ER stress, including brefeldin A, tunicamycin, and dithiothreitol. In contrast, expression of a catalytically inactive mutant of ERp16 potentiated such apoptosis, as did depletion of ERp16 by RNA interference. Our results suggest that ERp16 mediates disulfide bond formation in the ER and plays an important role in cellular defense against prolonged ER stress.