Toxoplasma gondii's single mitochondrion is very dynamic and undergoes morphological changes throughout the parasite's life cycle. During parasite division, the mitochondrion elongates, enters the daughter cells just prior to cytokinesis, and undergoes fission. Extensive morphological changes also occur as the parasite transitions from the intracellular environment to the extracellular environment. We show that treatment with the ionophore monensin causes reversible constriction of the mitochondrial outer membrane and that this effect depends on the function of the fission-related protein Fis1. We also observed that mislocalization of the endogenous Fis1 causes a dominant-negative effect that affects the morphology of the mitochondrion. As this suggests that Fis1 interacts with proteins critical for maintenance of mitochondrial structure, we performed various protein interaction trap screens. In this manner, we identified a novel outer mitochondrial membrane protein, LMF1, which is essential for positioning of the mitochondrion in intracellular parasites. Normally, while inside a host cell, the parasite mitochondrion is maintained in a lasso shape that stretches around the parasite periphery where it has regions of coupling with the parasite pellicle, suggesting the presence of membrane contact sites. In intracellular parasites lacking LMF1, the mitochondrion is retracted away from the pellicle and instead is collapsed, as normally seen only in extracellular parasites. We show that this phenotype is associated with defects in parasite fitness and mitochondrial segregation. Thus, LMF1 is necessary for mitochondrial association with the parasite pellicle during intracellular growth, and proper mitochondrial morphology is a prerequisite for mitochondrial division. IMPORTANCE Toxoplasma gondii is an opportunistic pathogen that can cause devastating tissue damage in the immunocompromised and congenitally infected. Current therapies are not effective against all life stages of the parasite, and many cause toxic effects. The single mitochondrion of this parasite is a validated drug target, and it changes its shape throughout its life cycle. When the parasite is inside a cell, the mitochondrion adopts a lasso shape that lies in close proximity to the pellicle. The functional significance of this morphology is not understood and the proteins involved are currently not known. We have identified a protein that is required for proper mitochondrial positioning at the periphery and that likely plays a role in tethering this organelle. Loss of this protein results in dramatic changes to the mitochondrial morphology and significant parasite division and propagation defects. Our results give important insight into the molecular mechanisms regulating mitochondrial morphology.