In the D171G/D230A mutant generated at conserved aspartate residues in the Exo1 and Exo2 sites of the 3'-5' exonuclease domain of the yeast mitochondrial DNA (mtDNA) polymerase (pol-gamma), the mitochondrial genome is unstable and the frequency of mtDNA point mutations is 1500 times higher than in the wild-type strain and 10 times higher than in single substitution mutants. The 10(4)-fold decrease in the 3'-5' exonuclease activity of the purified mtDNA polymerase is associated with mismatch extension and high rates of base misincorporation. Processivity of the purified polymerase on primed single-stranded DNA is decreased and the Km for dNTP is increased. The sequencing of mtDNA point mutations in the wild-type strain and in proofreading and mismatch-repair deficient mutants shows that mismatch repair contributes to elimination of the transitions while exonucleolytic proofreading preferentially repairs transversions, and more specifically A to T (or T to A) transversions. However, even in the wild-type strain, A to T (or T to A) transversions are the most frequent substitutions, suggesting that they are imperfectly repaired. The combination of both mismatch repair and proofreading deficiencies elicits a mitochondrial error catastrophe. These data show that the faithful replication of yeast mtDNA requires both exonucleolytic proofreading and mismatch repair.