Hydrogen peroxide (H2O2) is an important biological molecule, functioning both as a second messenger in cell signaling and, especially at higher concentrations, as a cause of cell damage. Cells harbor multiple enzymes that have peroxide reducing activity in vitro. However, the contribution of each of these enzymes towards peroxide scavenging in vivo is less clear. Therefore, to directly investigate in vivo peroxide scavenging, we used the genetically encoded peroxide sensors, roGFP2-Tsa2ΔCR and HyPer7, to systematically screen the peroxide scavenging capacity of baker’s yeast thiol and heme peroxidase mutants. We show that the 2-Cys peroxiredoxin Tsa1 alone is responsible for almost all exogenous H2O2 and tert-butyl hydroperoxide scavenging. Furthermore, Tsa1 can become an important source of H2O2-dependent cytosolic glutathione disulfide production. The two catalases and cytochrome c peroxidase only produce observable scavenging defects at higher H2O2 concentrations when these three heme peroxidases are deleted in combination. We also analyzed the reduction of Tsa1 in vitro, revealing that the enzyme is efficiently reduced by thioredoxin-1 with a rate constant of 2.8×106 M–1s–1 but not by glutaredoxin-2. Tsa1 reduction by reduced glutathione occurs nonenzymatically with a rate constant of 2.9 M–1s–1. Hence, the observed Tsa1-dependent glutathione disulfide production in yeast probably requires the oxidation of thioredoxins. Our findings clarify the importance of the various thiol and heme peroxidases for peroxide removal and suggest that most thiol peroxidases have alternative or specialized functions in specific subcellular compartments.