The role of protein degradation in mitochondrial homeostasis was explored by cloning of a gene from Saccharomyces cerevisiae that encodes a protein resembling the adenosine triphosphate (ATP)-dependent bacterial protease Lon. The predicted yeast protein has a typical mitochondrial matrix-targeting sequence at its amino terminus. Yeast cells lacking a functional LON gene contained a nonfunctional mitochondrial genome, were respiratory-deficient, and lacked an ATP-dependent proteolytic activity present in the mitochondria of Lon+ cells. Lon- cells were also impaired in their ability to catalyze the energy-dependent degradation of several mitochondrial matrix proteins and they accumulated electron-dense inclusions in their mitochondrial matrix.