Emerging evidence suggests that many proteins may be regulated through cysteine modification, but the extent and functions of this signaling remain largely unclear. The endoplasmic reticulum (ER) transmembrane protein IRE-1 maintains ER homeostasis by initiating the unfolded protein response (UPRER). Here we show in C. elegans and human cells that IRE-1 has a distinct redox-regulated function in cytoplasmic homeostasis. Reactive oxygen species (ROS) that are generated at the ER or by mitochondria sulfenylate a cysteine within the IRE-1 kinase activation loop. This inhibits the IRE-1-mediated UPRER and initiates the p38/SKN-1(Nrf2) antioxidant response, thereby increasing stress resistance and lifespan. Many AGC-family kinases (AKT, p70S6K, PKC, ROCK1) seem to be regulated similarly. The data reveal that IRE-1 has an ancient function as a cytoplasmic sentinel that activates p38 and SKN-1(Nrf2) and indicate that cysteine modifications induced by ROS signals can direct proteins to adopt unexpected functions and may coordinate many cellular processes. Display omitted •The ER stress sensor IRE-1 has a distinct function in cytoplasmic homeostasis•Local redox signals block IRE-1 ER signaling by sulfenylating a kinase cysteine•This functional switch initiates the p38/SKN-1(Nrf2) antioxidant response at IRE-1•The IRE-1 paradigm implies broad and versatile functions for signaling at cysteines We report that the transmembrane endoplasmic reticulum (ER) stress sensor IRE-1 has a redox-regulated cytoplasmic signaling function. Localized ROS sulfenylate an IRE-1 cysteine, inhibiting its ER functions and initiating the antioxidant response. IRE-1 therefore monitors cytoplasmic homeostasis through localized ROS signaling, suggesting that cysteine modifications have broad and diverse regulatory functions.