The thioredoxin-interacting protein TXNIP is a ubiquitously expressed redox protein that promotes apoptosis. Recently, we found that TXNIP deficiency protects against type 1 and 2 diabetes by inhibiting beta cell apoptosis and maintaining pancreatic beta cell mass, indicating that TXNIP plays a key role in beta cell biology. However, very little is known about the intracellular localization and function of TXNIP, and although TXNIP has been thought to be a cytoplasmic protein, our immunohistochemistry studies in beta cells surprisingly revealed a nuclear TXNIP localization, suggesting that TXNIP may shuttle within the cell. Using immunohistochemistry/confocal imaging and cell fractionation/co-immunoprecipitation, we found that, under physiological conditions, TXNIP is localized primarily in the nucleus of pancreatic beta cells, whereas oxidative stress leads to TXNIP shuttling into the mitochondria. In mitochondria, TXNIP binds to and oxidizes Trx2, thereby reducing Trx2 binding to ASK1 and allowing for ASK1 phosphorylation/activation, resulting in induction of the mitochondrial pathway of apoptosis with cytochrome c release and caspase-3 cleavage. TXNIP overexpression and Trx2 (but not cytosolic Trx1) silencing mimic these effects. Thus, we discovered that TXNIP shuttles between subcellular compartments in response to oxidative stress and identified a novel redox-sensitive mitochondrial TXNIP-Trx2-ASK1 signaling cascade.