The SCO1 gene of Saccharomyces cerevisiae encodes a 30 kDa protein which is specifically required for a post-translational step in the accumulation of subunits 1 and 2 of cytochrome c oxidase (COXI and COX-II). Antibodies directed against a beta-Gal::SCO1 fusion protein detect SCO1 in the mitochondrial fraction of yeast cells. The SCO1 protein is an integral membrane protein as shown by its resistance to alkaline extraction and by its solubilization properties upon treatment with detergents. Based on the results obtained by isopycnic sucrose gradient centrifugation and by digitonin treatment of mitochondria, SCO1 is a component of the inner mitochondrial membrane. Membrane localization is mediated by a stretch of 17 hydrophobic amino acids in the amino-terminal region of the protein. A truncated SCO1 derivative lacking this segment, is no longer bound to the membrane and simultaneously loses its biological function. The observation that membrane localization of SCO1 is affected in mitochondria of a rho0 strain, hints at the possible involvement of mitochondrially coded components in ensuring proper membrane insertion.