The fate of H2O2 in the endoplasmic reticulum (ER) has been inferred indirectly from the activity of ER localized thiol oxidases and peroxiredoxins, in vitro, and the consequences of their genetic manipulation, in vivo. Here we report on the development of TriPer, a vital optical probe sensitive to changes in the concentration of H2O2 in the thiol-oxidizing environment of the ER. Consistent with the hypothesized contribution of oxidative protein folding to H2O2 production, ER-localized TriPer detected an increase in the luminal H2O2 signal upon induction of pro-insulin (a disulfide bonded protein of pancreatic β-cells), which was attenuated by the ectopic expression of catalase in the ER lumen. Interfering with glutathione production in the cytosol by buthionine sulfoximine (BSO) or enhancing its localized destruction by expression of the glutathione-degrading enzyme ChaC1 in lumen of the ER, enhanced further the luminal H2O2 signal and eroded β-cell viability. Tracking ER H2O2 in live cells points to an unanticipated role for glutathione in H2O2 turnover.