Deinococcus radiodurans exhibits extreme resistance to DNA damage and is one of only few bacteria that encode two Dps (DNA protection during starvation) proteins. Dps-1 was shown previously to bind DNA with high affinity and to localize to the D. radiodurans nucleoid. A unique feature of Dps-2 is its predicted signal peptide. In the present paper, we report that Dps-2 assembly into a dodecamer requires the C-terminal extension and, whereas Dps-2 binds DNA with low affinity, it protects against degradation by reactive oxygen species. Consistent with a role for Dps-2 in oxidative stress responses, the Dps-2 promoter is up-regulated by oxidative stress, whereas the Dps-1 promoter is not. Although DAPI (4',6-diamidino-2-phenylindole) staining of Escherichia coli nucleoids shows that Dps-1 can compact genomic DNA, such nucleoid condensation is absent from cells expressing Dps-2. A fusion of EGFP (enhanced green fluorescent protein) to the Dps-2 signal peptide results in green fluorescence at the perimeter of D. radiodurans cells. The differential response of the Dps-1 and Dps-2 promoters to oxidative stress, the distinct cellular localization of the proteins and the differential ability of Dps-1 and Dps-2 to attenuate hydroxyl radical production suggest distinct functional roles; whereas Dps-1 may function in DNA metabolism, Dps-2 may protect against exogenously derived reactive oxygen species.