It is generally accepted that intracellular oxidative stress induced by proteasome inhibitors is a byproduct of endoplasmic reticulum (ER) stress. Here we report a mechanism underlying the ability of proteasome inhibitors bortezomib (BTZ) and carfilzomib (CFZ) to directly induce oxidative and ER stresses in multiple myeloma (MM) cells via transcriptional repression of a gene encoding mitochondrial thioredoxin reductase (TXNRD2). TXNRD2 is critical for maintenance of intracellular red–ox status and detoxification of reactive oxygen species. Depletion of TXNRD2 to the levels detected in BTZ-or CFZ-treated cells causes oxidative stress, ER stress and death similar to those induced by proteasome inhibitors. Reciprocally, restoration of near-wildtype TXNRD2 amounts in MM cells treated with proteasome inhibitors reduces oxidative stress, ER stress and cell death by~ 46%,~ 35% and~ 50%, respectively, compared with cells with unrestored TXNRD2 levels. Moreover, cells from three MM cell lines selected for resistance to BTZ demonstrate elevated levels of TXNRD2, indirectly confirming its functional role in BTZ resistance. Accordingly, ectopic expression of TXNRD2 in MM cell xenografts in immunocompromised mice blunts therapeutic effects of BTZ. Our data identify TXNRD2 as a potentially clinically relevant target, inhibition of which is critical for proteasome inhibitor-dependent cytotoxicity, oxidative stress and ER stress.