Although evidence has accumulated on the role of plant peptides in the response to external conditions, the number of peptide-encoding genes in the genome is still underestimated. Using tiling arrays, we identified 176 unannotated transcriptionally active regions (TARs) in Arabidopsis thaliana that were induced upon oxidative stress generated by the herbicide paraquat (PQ). These 176 TARs could be translated into 575 putative oxidative stress-induced peptides (OSIPs). A high-throughput functional assay was used in the eukaryotic model organism Saccharomyces cerevisiae allowing us to test for bioactive peptides that increase oxidative stress tolerance. In this way, we identified three OSIPs that, upon overexpression in yeast, resulted in a significant rise in tolerance to hydrogen peroxide (H2O2). For one of these peptides, the decapeptide OSIP108, exogenous application to H2O2-treated yeast also resulted in significantly increased survival. OSIP108 is contained within a pseudogene and is induced in A. thaliana leaves by both the reactive oxygen species-inducer PQ and the necrotrophic fungal pathogen Botrytis cinerea. Moreover, infiltration and overexpression of OSIP108 in A. thaliana leaves resulted in increased tolerance to treatment with PQ. In conclusion, the identification and characterization of OSIP108 confirms the validity of our high-throughput approach, based on tiling array analysis in A. thaliana and functional screening in yeast, to identify bioactive peptides.