Thiol-specific peroxidase that catalyzes the reduction of hydrogen peroxide and organic hydroperoxides to water and alcohols, respectively. Plays a role in cell protection against oxidative stress by detoxifying peroxides and as sensor of hydrogen peroxide-mediated signaling events (PubMed:17409354, PubMed:20356456). Relays hydrogen peroxide as a signal to the transcription factor pap1 by inducing the formation of intramolecular disulfide bonds in pap1, which causes its nuclear accumulation and activation (PubMed:15824112, PubMed:24316080). Reduced by srx1 and this regulation acts as a molecular switch controlling the transcriptional response to hydrogen peroxide (PubMed:15956211). [thioredoxin]-dithiol + a hydroperoxide = [thioredoxin]-disulfide + an alcohol + H2O Homodimer; disulfide-linked, upon oxidation (PubMed:11795888, PubMed:20356456, PubMed:24316080). Interacts with srx1 in response to oxidative stress (PubMed:15824112). Interacts with pap1 via transient disulfide linkages (PubMed:24316080). The enzyme can be inactivated by further oxidation of the cysteine sulfenic acid (C(P)-SOH) to sulphinic acid (C(P)-SO2H) instead of its condensation to a disulfide bond. It can be reactivated by forming a transient disulfide bond with sulfiredoxin srx1, which reduces the cysteine sulfinic acid in an ATP- and Mg-dependent manner. The active site is a conserved redox-active cysteine residue, the peroxidatic cysteine (C(P)), which makes the nucleophilic attack on the peroxide substrate. The peroxide oxidizes the C(P)-SH to cysteine sulfenic acid (C(P)-SOH), which then reacts with another cysteine residue, the resolving cysteine (C(R)), to form a disulfide bridge. The disulfide is subsequently reduced by an appropriate electron donor to complete the catalytic cycle. In the typical 2-Cys AhpC/Prx1 family, C(R) is provided by the other dimeric subunit to form an intersubunit disulfide. The disulfide is subsequently reduced by thioredoxin. Belongs to the peroxiredoxin family. AhpC/Prx1 subfamily.