Iron-sulfur (Fe/S) proteins are located in mitochondria, cytosol, and nucleus. Mitochondrial Fe/S proteins are matured by the iron-sulfur cluster (ISC) assembly machinery. Little is known about the formation of Fe/S proteins in the cytosol and nucleus. A function of mitochondria in cytosolic Fe/S protein maturation has been noted, but small amounts of some ISC components have been detected outside mitochondria. Here, we studied the highly conserved yeast proteins Isu1p and Isu2p, which provide a scaffold for Fe/S cluster synthesis. We asked whether the Isu proteins are needed for biosynthesis of cytosolic Fe/S clusters and in which subcellular compartment the Isu proteins are required. The Isu proteins were found to be essential for de novo biosynthesis of both mitochondrial and cytosolic Fe/S proteins. Several lines of evidence indicate that Isu1p and Isu2p have to be located inside mitochondria in order to perform their function in cytosolic Fe/S protein maturation. We were unable to mislocalize Isu1p to the cytosol due to the presence of multiple, independent mitochondrial targeting signals in this protein. Further, the bacterial homologue IscU and the human Isu proteins (partially) complemented the defects of yeast Isu protein-depleted cells in growth rate, Fe/S protein biogenesis, and iron homeostasis, yet only after targeting to mitochondria. Together, our data suggest that the Isu proteins need to be localized in mitochondria to fulfill their functional requirement in Fe/S protein maturation in the cytosol.