NADPH oxidases of the Nox family are important sources of reactive oxygen species (ROS). Different to the typical Nox homologues Nox1 and Nox2, the ubiquitously expressed Nox4 produces hydrogen peroxide (H2O2) rather than superoxide (O2-). The mechanism underlying this physiologically important difference is not understood but might involve different intracellular localizations or enzymatic activities of this homologue. We constructed chimeric Nox proteins and mutants to address this question. ROS were measured with chemiluminescence (luminol peroxidase for H2O2 and L-012 for O2-) and intracellular localization was determined by fractionation and confocal microscopy. When transfected into HEK293 cells, Nox1 localized to the plasma membrane (PM), whereas Nox4 resided in the endoplasmic reticulum (ER). When the potential signal peptide of Nox4 was fused to Nox1 PM-localization was lost and the protein retained in vesicle-like structures below the PM but still produced O2-. The potential signal peptide of Nox1 failed to translocate Nox4 to the PM; the protein was still seen in ER-like structures. However, the type of ROS released by Nox4 changed from H2O2 to O2-, suggesting that ER-localization does not preclude O2- detection in the extracellular space. Rather a specific configuration of the extracytosolic part of the protein has to determine the type of ROS generated. The third extracytosolic loop of Nox4 is 28 aminoacids longer than the loop of Nox1 or Nox2 and thus could potentially form a pocket to allow H2O2 formation. Indeed, deletion of the amino acids only present in Nox4 changed the type of ROS released from H2O2 to O2- despite the preserved ER-localization. The structure of the pocket is maintained by two conserved Cysteins whose exchange to valin blocked Nox1 activity and also prevented H2O2 formation by Nox4. These date demonstrate that differences in the enzymatic mechanisms but not in localization determines the type of ROS produced by NADPH oxidases.