Native disulfide bond formation in eukaryotes is dependent on protein-disulfide isomerase (PDI) and its homologs, which contain varying combinations of catalytically active and inactive thioredoxin domains. However, the specific contribution of PDI to the formation of new disulfides versus reduction/rearrangement of non-native disulfides is poorly understood. We analyzed the role of individual PDI domains in disulfide bond formation in a reaction driven by their natural oxidant, Ero1p. We found that Ero1p oxidizes the isolated PDI catalytic thioredoxin domains, A and A' at the same rate. In contrast, we found that in the context of full-length PDI, there is an asymmetry in the rate of oxidation of the two active sites. This asymmetry is the result of a dual effect: an enhanced rate of oxidation of the second catalytic (A') domain and the substrate-mediated inhibition of oxidation of the first catalytic (A) domain. The specific order of thioredoxin domains in PDI is important in establishing the asymmetry in the rate of oxidation of the two active sites thus allowing A and A', two thioredoxin domains that are similar in sequence and structure, to serve opposing functional roles as a disulfide isomerase and disulfide oxidase, respectively. These findings reveal how native disulfide folding is accomplished in the endoplasmic reticulum and provide a context for understanding the proliferation of PDI homologs with combinatorial arrangements of thioredoxin domains.