To better understand the response to mitochondrial dysfunction, we examined the mechanism by which ATFS-1 (activating transcription factor associated with stress-1) senses mitochondrial stress and communicates with the nucleus during the mitochondrial unfolded protein response (UPRmt) in Caenorhabditis elegans. We found that the key point of regulation is the mitochondrial import efficiency of ATFS-1. In addition to a nuclear localization sequence, ATFS-1 has an N-terminal mitochondrial targeting sequence that is essential for UPRmt repression. Normally, ATFS-1 is imported into mitochondria and degraded. However, during mitochondrial stress, we found that import efficiency was reduced, allowing a percentage of ATFS-1 to accumulate in the cytosol and traffic to the nucleus. Our results show that cells monitor mitochondrial import efficiency via ATFS-1 to coordinate the level of mitochondrial dysfunction with the protective transcriptional response.