Pig thyroid plasma membranes contain a Ca2+-dependent NADPH:O2 oxidoreductase, the thyroid NADPH-dependent H2O2 generator. This provided the H2O2 for the peroxidase-catalysed synthesis of thyroid hormones. The effect of the tervalent arsenical, phenylarsine oxide (PAO), on the NADPH oxidase was studied. PAO caused two directly related dose-dependent effects with similar half-effect concentrations of PAO (3 nmol of PAO/mg of protein): (i) partial inactivation of H2O2 formation by the Ca2+-stimulated enzyme, and (ii) desensitization of the enzyme activity to Ca2+. PAO had no effect on membranes that had been Ca2+-desensitized by α-chymotrypsin treatment. The NADPH oxidase in membranes treated with excess PAO had the same Vmax with and without Ca2+. This value was half the Vmax of the native enzyme. However, the Km for NADPH determined with Ca2+ (18 ƁM, identical with that of the native enzyme) was approx. one-third of the Km measured without Ca2+, showing the direct action of Ca2+ on the PAOŐenzyme complex. PAO had the same effects, partial inactivation and Ca2+ desensitization, on the NADPH:ferricyanide oxidoreductase activity of the NADPH oxidase, suggesting that PAO acts on the flavodehydrogenase entity of the enzyme. Both partial inactivation and Ca2+ desensitization were completely and specifically reversed by 2,3-dimercaptopropanol, partly reversed by dithiothreitol and not reversed by 2-mercaptoethanol, indicating that PAO binds to vicinal thiol groups. These results suggest that thiol groups are involved in the control of thyroid NADPH oxidase by Ca2+; PAO bound to vicinal thiols might alter the structure of the enzyme so that electron transfer occurs without Ca2+ but more slowly.