An ATP-dependent proteolysis system in yeast mitochondria was characterized by examining the hydrolysis of mitochondrial translation products in isolated mitochondria. Degradation of [35S]methionine-labeled polypeptides synthesized in isolated yeast mitochondria was activated by exogenously added ATP. ADP, GTP, and CTP substituted for ATP to some extent, but nonhydrolyzable ATP analogues did not. Adenosine-5'-O-(3'-thio-triphosphate) effectively competed with ATP as activator. Carboxyatractyloside, an inhibitor of adenine nucleotide translocation across the mitochondrial inner membrane, and the metal chelator o-phenanthroline inhibited the ATP-dependent proteolysis. The latter inhibition was abolished by subsequent addition of Mn2+ or Co2+ but not Ca2+ or Zn2+. Hemin inhibited the ATP-dependent proteolysis of mitochondrial translation products with a half-maximum inhibition at 12 microM. Analysis by SDS-polyacrylamide gel electrophoresis showed that [35S]methionine-labeled polypeptides were rapidly degraded into low-molecular-weight species. Submitochondrial particles retained the ATP-dependent proteolytic activity and had the same spectrum of inhibitors as intact mitochondria except for a reduced effect of carboxyatractyloside. These results indicate that yeast mitochondria contain an ATP-dependent and hemin-sensitive proteolysis system which is associated with the inner membrane and can hydrolyze mitochondrial translation products, and that a chelator-sensitive protease is probably involved in this system.