The sensing of reactive oxygen species is essential for cellular responses to oxidative stress. The sensing of peroxides is typically mediated by redox-active cysteines in sensors such as the bacterial OxyR, OhrR, and Hsp33 proteins. Bacillus subtilis PerR is the prototype for a widespread family of metal-dependent peroxide sensors that regulate inducible peroxide-defence genes. Here we show that PerR senses peroxides by metal-catalysed oxidation. PerR contains two metal-binding sites: a structural Zn2+ site and a regulatory divalent metal ion site that preferentially binds Fe2+ or Mn2+ (ref. 5). Protein oxidation, catalysed by a bound ferrous ion, leads to the rapid and direct incorporation of one oxygen atom into histidine 37 (H37) or H91, two of the residues that coordinate the bound Fe2+. This mechanism accounts for the ability of PerR to sense low levels of hydrogen peroxide in vivo. The reduction of hydrogen peroxide by metal ions to generate highly reactive hydroxyl radicals underlies the genotoxic effects of peroxides, and has been shown to contribute to enzyme inactivation, but has not previously been shown to provide a regulatory mechanism for peroxide sensing.