Abstract: The transcription factors Aft1 and Aft2 from Saccharomyces cerevisiae regulate the expression of genes that are involved in iron homeostasis. These factors induce the expression of iron regulon genes in iron-deficient yeast, but are inactivated in iron-replete cells. Iron inhibition of Aft1/Aft2 was previously shown to be dependent on the mitochondrial ISC export pathway. We presently show that the nuclear monothiol glutaredoxins Grx3 and Grx4 are critical for iron-inhibition of Aft1 function in yeast cells. Cells lacking both glutaredoxins show constitutive expression of iron regulon genes. Overexpression of Grx4 attenuates wild-type Aft1 activity. Grx3 and Grx4 contain a thioredoxin-like domain in addition to the glutaredoxin domain. The thioredoxin-like domain is dispensable in mediating iron-inhibition of Aft1 activity, whereas the conserved cysteine that is part of the conserved CGFS motif in monothiol glutaredoxins is essential for this function. Grx3 and Grx4 interact with Aft1 as shown by two-hybrid interactions and co-immuno-precipitation assays. The interaction between glutaredoxins and Aft1 is not modulated by the iron status of cells, but is dependent on the conserved glutaredoxin domain Cys residue. Thus, Grx3 and Grx4 are novel components required for iron regulation of Aft1 which most likely occurs in the nucleus.