In vitro, protein disulfide isomerase (Pdi1p) introduces disulfides into proteins (oxidase activity) and provides quality control by catalyzing the rearrangement of incorrect disulfides (isomerase activity). Protein disulfide isomerase (PDI) is an essential protein in Saccharomyces cerevisiae, but the contributions of the catalytic activities of PDI to oxidative protein folding in the endoplasmic reticulum (ER) are unclear. Using variants of Pdi1p with impaired oxidase or isomerase activity, we show that isomerase-deficient mutants of PDI support wild-type growth even in a strain in which all of the PDI homologues of the yeast ER have been deleted. Although the oxidase activity of PDI is sufficient for wild-type growth, pulse-chase experiments monitoring the maturation of carboxypeptidase Y reveal that oxidative folding is greatly compromised in mutants that are defective in isomerase activity. Pdi1p and one or more of its ER homologues (Mpd1p, Mpd2p, Eug1p, Eps1p) are required for efficient carboxypeptidase Y maturation. Consistent with its function as a disulfide isomerase in vivo, the active sites of Pdi1p are partially reduced (32 +/- 8%) in vivo. These results suggest that PDI and its ER homologues contribute both oxidase and isomerase activities to the yeast ER. The isomerase activity of PDI can be compromised without affecting growth and viability, implying that yeast proteins that are essential under laboratory conditions may not require efficient disulfide isomerization.