We have found a cruciform cutting endonuclease in the yeast, Saccharomyces cerevisiae, which localizes to the mitochondria. This activity apparently is associated with the mitochondrial inner membrane since the activity is not released into solution by osmolysis, in contrast to the matrix enzyme, isocitrate dehydrogenase. The cruciform cutting activity appears to be encoded by CCE1. This gene has been shown to encode one of the major cruciform cutting endonucleases present in yeast cell. In cce1 strains, which lack CCE1 endonuclease activity, the mitochondrial cruciform cutting endonucleolytic activity is also absent. Since CCE1 is allelic to MGT1, a gene required for the highly biased transmission of petite mitochondrial DNA in crosses between rho+ and hypersuppressive rho- cells, it seems likely that the CCE1 endonuclease functions within mitochondria.