The isolation and characterization of MGM1, an yeast gene with homology to members of the dynamin gene family, is described. The MGM1 gene is located on the right arm of chromosome XV between STE4 and PTP2. Sequence analysis revealed a single open reading frame of 902 residues capable of encoding a protein with an approximate molecular mass of 101 kDa. Loss of MGM1 resulted in slow growth on rich medium, failure to grow on non-fermentable carbon sources, and loss of mitochondrial DNA. The mitochondria also appeared abnormal when visualized with an antibody to a mitochondrial-matrix marker. MGM1 encodes a dynamin-like protein involved in the propagation of functional mitochondria in yeast.