The gene coding for the yeast mitochondrial F1-ATPase beta subunit (ATP2) has been fused to the Escherichia coli lacZ gene. The chimeric ATP2-lacZ gene codes for a hybrid protein consisting of some 350 amino acids of the F1-ATPase beta subunit at its amino terminus and a large enzymatically active portion of the lacZ gene product, beta-galactosidase (beta-D-galactoside galactohydrolase, EC 3.2.1.23), at its carboxyl terminus. The beta-subunit-beta-galactosidase hybrid protein is expressed in both E. coli and yeast. In yeast, this hybrid molecule is targeted to the mitochondrion and is protected in isolated mitochondria from added protease under conditions in which an outer membrane enzymatic marker is digested. Yeast cells carrying the ATP2-lacZ gene fusion on plasmid p beta Z1 are unable to grow on a nonfermentable carbon source. Upon loss of the p beta Z1 plasmid, growth of the cured host strain on the nonfermentable substrate is restored. In the presence of the beta-subunit-beta-galactosidase hybrid protein, the energy-transducing capacity of the mitochondrial membrane as measured by the 32Pi-ATP exchange reaction is only 9% of that measured in the absence of the gene fusion product. The results indicate that it is the presence of the beta-subunit-beta-galactosidase hybrid protein within mitochondria that interferes with function(s) essential for respiratory growth. These observations open up the prospect of genetic characterization of the signals and cellular machinery responsible for mitochondrial protein delivery.