Mutations in DJ-1 cause recessively transmitted early-onset Parkinson disease (PD), and oxidative damage to DJ-1 has been associated with the pathogenesis of late-onset sporadic PD. The precise biochemical function of DJ-1 remains elusive. Here, we report that DJ-1 is synthesized as a latent protease zymogen with low-intrinsic proteolytic activity. DJ-1 protease zymogen is activated by the removal of a 15-amino acid peptide at its C terminus. The activated DJ-1 functions as a cysteine protease with Cys-106 and His-126 as the catalytic diad. We show that endogenous DJ-1 in dopaminergic cells undergoes C-terminal cleavage in response to mild oxidative stress, suggesting that DJ-1 protease activation occurs in a redox-dependent manner. Moreover, we find that the C-terminally cleaved form of DJ-1 with activated protease function exhibits enhanced cytoprotective action against oxidative stress-induced apoptosis. The cytoprotective action of DJ-1 is abolished by the C106A and H126A mutations. Our findings support a role for DJ-1 protease in cellular defense against oxidative stress and have important implications for understanding and treating PD.