Cu/Zn Superoxide Dismutase (Sod1) is a highly conserved and abundant metalloenzyme that catalyzes the disproportionation of superoxide radicals into hydrogen peroxide and molecular oxygen. As a consequence, Sod1 serves dual roles in oxidative stress protection and redox signaling by both scavenging cytotoxic superoxide radicals and producing hydrogen peroxide that can be used to oxidize and regulate the activity of downstream targets. However, the relative contributions of Sod1 to protection against oxidative stress and redox signaling are poorly understood. Using the model unicellular eukaryote, Baker's yeast, we found that only a small fraction of the total Sod1 pool is required for protection against superoxide toxicity and that this pool is localized to the mitochondrial intermembrane space. On the contrary, we find that much larger amounts of extra-mitochondrial Sod1 are critical for peroxide-mediated redox signaling. Altogether, our results force the re-evaluation of the physiological role of bulk Sod1 in redox biology; namely, we propose that the vast majority of Sod1 in yeast is utilized for peroxide-mediated signaling rather than superoxide scavenging.