The protein specified by the Saccharomyces cerevisiae nuclear gene PET111 specifically activates translation of the mitochondrially coded mRNA for cytochrome c oxidase subunit II (Cox2p). We found Pet111p specifically in mitochondria of both wild-type cells and cells expressing a chromosomal gene for a functional epitope-tagged form of Pet111p. Pet111p was associated with mitochondrial membranes and was highly resistant to extraction with alkaline carbonate. Pet111p was protected from proteolytic digestion by the mitochondrial inner membrane. Thus, it is exposed only on the matrix side, where it could participate directly in organellar translation and localize Cox2p synthesis by virtue of its functional interaction with the COX2 mRNA 5'-untranslated leader. We also found that Pet111p is present at levels limiting the synthesis of Cox2p by examining the effect of altered PET111 gene dosage in the nucleus on expression of a reporter gene, cox2::ARG8(m), that was inserted into mitochondrial DNA. The level of the reporter protein, Arg8p, was one-half that of wild type in a diploid strain heterozygous for a pet111 deletion mutation, whereas it was increased 2.8-fold in a strain bearing extra copies of PET111 on a high-copy plasmid. Thus, Pet111p could play dual roles in both membrane localization and regulation of Cox2p synthesis within mitochondria.