In the present study we have identified a new metalloprotease encoded by the nuclear ATP23 gene of Saccharomyces cerevisiae that is essential for expression of mitochondrial ATPase (F(1)-F(O) complex). Mutations in ATP23 cause the accumulation of the precursor form of subunit 6 and prevent assembly of F(O). Atp23p is associated with the mitochondrial inner membrane and is conserved from yeast to humans. A mutant harboring proteolytically inactive Atp23p accumulates the subunit 6 precursor but is nonetheless able to assemble a functional ATPase complex. These results indicate that removal of the subunit 6 presequence is not an essential event for ATPase biogenesis and that Atp23p, in addition to its processing activity, must provide another important function in F(O) assembly. The product of the yeast ATP10 gene was previously shown to interact with subunit 6 and to be required for its association with the subunit 9 ring. In this study one extra copy of ATP23 was found to be an effective suppressor of an atp10 null mutant, suggesting an overlap in the functions of Atp23p and Atp10p. Atp23p may, therefore, also be a chaperone, which in conjunction with Atp10p mediates the association of subunit 6 with the subunit 9 ring.