The Saccharomyces cerevisiae nuclear gene for a 78-kDa mitochondrial heat shock protein (hsp78) was identified in a lambda gt11 expression library through immunological screening with an hsp78-specific monoclonal antibody. Sequencing of HSP78 revealed a long open reading frame capable of encoding an 811-amino-acid, 91.3-kDa basic protein with a putative mitochondrial leader sequence and two potential nucleotide-binding sites. Sequence comparisons revealed that hsp78 is a member of the highly conserved family of Clp proteins and is most closely related to the Escherichia coli ClpB protein, which is thought to be an ATPase subunit of an intracellular ATP-dependent protease. The steady-state levels of HSP78 transcripts and protein varied in response to both thermal stress and carbon source with an approximately 30-fold difference between repressed levels in cells growing fermentatively on glucose at 30 degrees C and derepressed levels in heat-shocked cells growing on a nonfermentable carbon source. The response to heat shock is consistent with the presence of a characteristic heat shock regulatory element in the 5'-flanking DNA. Submitochondrial fractionation showed that hsp78 is a soluble protein located in the mitochondrial matrix. Cells carrying disrupted copies of HSP78 lacked hsp78 but were not impaired in respiratory growth at normal and elevated temperatures or in the ability to survive and retain mitochondrial function after thermal stress. The absence of a strong mitochondrial phenotype in hsp78 mutants is comparable to the nonlethal phenotypes of mutations in other Clp genes in bacteria and yeast. HSP78 is the third gene, with SSC1 and HSP60, known to encode a yeast mitochondrial heat shock protein and the second gene, with HSP104, for a yeast ClpB homolog.