The Saccharomyces cerevisiae gene, HFA1, encodes a >250-kDa protein, which is required for mitochondrial function. Hfa1p exhibits 72% overall sequence similarity (54% identity) to ACC1-encoded yeast cytoplasmic acetyl-CoA carboxylase. Nevertheless, HFA1 and ACC1 functions are not overlapping because mutants of the two genes have different phenotypes and do not complement each other. Whereas ACC1 is involved in cytoplasmic fatty acid synthesis, the phenotype of hfa1⌬ disruptants resembles that of mitochondrial fatty-acid synthase mutants. They fail to grow on lactate or glycerol, and the mitochondrial cofactor, lipoic acid, is reduced to <10% of its normal cellular concentration. Other than Acc1p, the N-terminal sequence of Hfa1p comprises a canonical mitochondrial targeting signal together with a matrix protease cleavage site. Accordingly, the HFA1-encoded protein was specifically assigned by Western blotting of appropriate cell fractions to the mitochondrial compartment. Removal of the mitochondrial targeting sequence abolished the competence of HFA1 DNA to complement hfal null mutants. Conversely and in contrast to the intact HFA1 sequence, the signal sequence-free HFA1 gene complemented the mutational loss of cytoplasmic acetyl-CoA carboxylase. Expression of HFA1 under the control of the ACC1 promoter restored cellular ACC activity in ACC1-defective yeast mutants to wild type levels. From this finding, it is concluded that HFA1 encodes a specific mitochondrial acetyl-CoA carboxylase providing malonyl-CoA for intraorganellar fatty acid and, in particular, lipoic acid synthesis.