Exposure to cadmium (Cd) elicits a range of adverse responses including oxidative damage and cancer. The molecular targets of Cd remain largely unidentified. Here, we analyzed the function and signal transduction of transcription factor Nrf2 in protection against Cd-induced oxidative stress. Wild-type (Nrf2 (+/+)) mouse embryonic fibroblasts (MEF) produced reactive oxygen species (ROS) at a low level, whereas treatment with Cd significantly increased the ROS production. On the other hand, Nrf2 knockout (Nrf2 (-/-)) MEF cells exhibited an elevated level of ROS under a basal condition, and Cd dramatically increased the ROS production at concentrations as low as 2 microM, resulting in increased sensitivity to Cd-induced cell death. Cd induced the basal and inducible expression of cytoprotective enzymes NQO1 and HO1 in WT MEF cells, but induction was lost in Nrf2 (-/-) MEF cells. Induction of the genes required antioxidant response elements (ARE) as Cd drove ARE-dependent reporter expression and Cd-activated Nrf2 bound to endogenous AREs in mouse hepa1c1c7 cells. Activation of Nrf2 by Cd involved stabilization of the Nrf2 protein, increased formation of Nrf2/Keap1 complex in the cytoplasm, translocation of the complex into the nucleus, and subsequently disruption of the complex. Lastly, Nrf2 was found ubiquitinated in the cytoplasm but deubiquitinated in the nucleus. The study provided a mechanistic transcriptional model in which Cd activates Nrf2 through a metal-activated signaling pathway involving a dynamic interplay between ubiquitination/deubiquitination and complex formation/dissociation of Nrf2 and Keap1.