Thylakoids are the photosynthetic membranes in chloroplasts and cyanobacteria. The aqueous phase inside the thylakoid known as the thylakoid lumen plays an essential role in the photosynthetic electron transport. The presence and significance of thiol-disulfide exchange in this compartment have been recognized but remain poorly understood. All proteins found free in the thylakoid lumen and some proteins associated to the thylakoid membrane require an N-terminal targeting signal, which is removed in the lumen by a membrane-bound serine protease called thylakoidal processing peptidase (TPP). TPP is homologous to Escherichia coli type I signal peptidase (SPI) called LepB. Genetic data indicate that plastidic SPI 1 (Plsp1) is the main TPP in Arabidopsis thaliana (Arabidopsis) although biochemical evidence had been lacking. Here we demonstrate catalytic activity of bacterially produced Arabidopsis Plsp1. Recombinant Plsp1 showed processing activity against various TPP substrates at a level comparable to that of LepB. Plsp1 and LepB were also similar in the pH optima, sensitivity to arylomycin variants and a preference for the residue at -3 to the cleavage site within a substrate. Plsp1 orthologs found in angiosperms contain two unique Cys residues located in the lumen. Results of processing assays suggested that these residues were redox active and formation of a disulfide bond between them was necessary for the activity of recombinant Arabidopsis Plsp1. Furthermore, Plsp1 in Arabidopsis and pea thylakoids migrated faster under non-reducing conditions than under reducing conditions on SDS-PAGE. These results underpin the notion that Plsp1 is a redoxdependent signal peptidase in the thylakoid lumen.