Protein folding in mitochondria is mediated by the chaperonin Hsp60, the homologue of E. coli GroEL. Mitochondria also contain a homologue of the cochaperonin GroES, called Hsp10, which is a functional regulator of the chaperonin. To define the in vivo role of the co-chaperonin, we have used the genetic and biochemical potential of the yeast S. cerevisiae. The HSP10 gene was cloned and sequenced and temperature-sensitive lethal hsp10 mutants were generated. Our results identify Hsp10 as an essential component of the mitochondrial protein folding apparatus, participating in various aspects of Hsp60 function. Hsp10 is required for the folding and assembly of proteins imported into the matrix compartment, and is involved in the sorting of certain proteins, such as the Rieske Fe/S protein, passing through the matrix en route to the intermembrane space. The folding of the precursor of cytosolic dihydrofolate reductase (DHFR), imported into mitochondria as a fusion protein, is apparently independent of Hsp10 function consistent with observations made for the chaperonin-mediated folding of DHFR in vitro. The temperature-sensitive mutations in Hsp10 map to a domain (residues 25-40) that corresponds to a previously identified mobile loop region of bacterial GroES and result in a reduced binding affinity of hsp10 for the chaperonin at the non-permissive temperature.