To survive hostile conditions, the bacterial pathogen Mycobacterium tuberculosis produces millimolar concentrations of mycothiol as a redox buffer against oxidative stress. The reductases that couple the reducing power of mycothiol to redox active proteins in the cell are not known. We report a novel mycothiol-dependent reductase (mycoredoxin-1) with a CGYC catalytic motif. With mycoredoxin-1 and mycothiol deletion strains of Mycobacterium smegmatis, we show that mycoredoxin-1 and mycothiol are involved in the protection against oxidative stress. Mycoredoxin-1 acts as an oxidoreductase exclusively linked to the mycothiol electron transfer pathway and it can reduce S-mycothiolated mixed disulphides. Moreover, we solved the solution structures of oxidized and reduced mycoredoxin-1, revealing a thioredoxin fold with a putative mycothiol-binding site. With HSQC snapshots during electron transport, we visualize the reduction of oxidized mycoredoxin-1 as a function of time and find that mycoredoxin-1 gets S-mycothiolated on its N-terminal nucleophilic cysteine. Mycoredoxin-1 has a redox potential of −218 mV and hydrogen bonding with neighbouring residues lowers the pKa of its N-terminal nucleophilic cysteine. Determination of the oxidized and reduced structures of mycoredoxin-1, better understanding of mycothiol-dependent reactions in general, will likely give new insights in how M. tuberculosis survives oxidative stress in human macrophages.