During aerobic growth, Streptococcus pneumoniae generates large amounts of hydrogen peroxide that can accumulate to millimolar concentrations. The mechanism by which this catalase-negative bacterium can withstand endogenous hydrogen peroxide is not fully understood, but alkylhydroperoxidase D (AhpD) has been shown to contribute to pneumococcal virulence and the oxidative stress response in vivo. We show that SpAhpD exhibits weak thiol-dependent peroxidase activity. In contrast to the AhpC/D system reported in Mycobacterium tuberculosis, functional studies demonstrate that SpAhpD does not mediate electron transfer to SpAhpC. The 2.3-Å resolution crystal structure (PDB: 6E8L) reveals several unusual structural features, including a three-cysteine active site architecture that is buried in a deep pocket, in contrast to the usual two cysteine residues found in other AhpD enzymes. All single cysteine mutants of SpAhpD remained partially active, and LC-MS/MS revealed that the third Cys163 forms disulfide bonds with either cysteine residues of the canonical Cys78-X-X-Cys81 motif. SpAhpD forms a unique dimeric quaternary structure in the crystal and in solution. The highly conserved Asn76 of the AhpD core motif was shown to be important for protein folding. We suggest that the biological role of SpAhpD is unlikely to be the removal of peroxides either directly or via AhpC. This opens the possibility that oxidation of SpAhpD cysteines acts as a functional redox switch or mediates electron transfer with other thiol proteins.