The regulatory mechanisms of yeast Sir2, the founding member of the sirtuin family involved in oxidative stress and aging, are unknown. Redox signaling controls many cellular functions, especially under stress situations, with dithiol glutaredoxins (Grxs) playing an important role. However, monothiol Grxs are not considered to have major oxidoreductase activity. The present study investigated the redox regulation of yeast Sir2, together with the role and physiological impact of monothiol Grx3/4 as Sir2 thiol-reductases upon stress. S-glutathionylation of Sir2 upon disulfide stress was demonstrated both in vitro and in vivo, and decreased Sir2 deacetylase activity. Physiological levels of nuclear Grx3/4 can reverse the observed post-translational modification. Grx3/4 interacted with Sir2 and reduced it after stress, thereby restoring telomeric silencing activity. Using site-directed mutagenesis, key cysteine residues at the catalytic domain of Sir2 were identified as a target of S-glutathionylation. Mutation of these residues resulted in cells with increased resistance to disulfide stress. We provide new mechanistic insights into Grx3/4 regulation of Sir2 by S-deglutathionylation to increase cell resistance to stress. This finding offers news perspectives on monothiol Grxs in redox signaling, describing Sir2 as a physiological substrate regulated by S-glutathionylation. These results might have a relevant role in understanding aging and age-related diseases.