Overexpression of c-Myc results in transformation and multiple other phenotypes and is accompanied by the deregulation of a large number of target genes. We previously demonstrated that peroxiredoxin 1 (Prdx1), a scavenger of reactive oxygen species (ROS), interacts with a region of the c-Myc transcriptional regulatory domain that is essential for transformation. This results either in the suppression or enhancement of some c-Myc functions and in the altered expression of select target genes. Most notably, c-Myc-mediated transformation is inhibited, implying a tumor suppressor role for Prdx1. Consistent with this, prdx1−/− mice develop age-dependent hemolytic anemias and/or malignancies. We now show that erythrocytes and embryonic fibroblasts from these animals contain higher levels of ROS and that the latter cells show evidence of c-Myc activation, including the ability to be transformed by a ras oncogene alone. In contrast, other primary cells from prdx1−/− mice do not have elevated ROS, but nonetheless show increased oxidative DNA damage. This apparent paradox can be explained by the fact that ROS localize primarily to the cytoplasm of prdx1+/+ cells, whereas in prdx1−/− cells, much higher levels of nuclear ROS are seen. We suggest that increased DNA damage and tumor susceptibility in prdx1−/− animals results from this shift in intracellular ROS. prdx1−/− mice should be useful in studying the role of oxidative DNA damage in the causation of cancer and its prevention by antioxidants. They should also help in studying the relationship between oncogenes such as c-Myc and DNA damage.