In earlier research, we identified a 43-kDa c-ErbAalpha1 protein (p43) in the mitochondrial matrix of rat liver. In the present work, binding experiments indicate that p43 displays an affinity for triiodothyronine (T3) similar to that of the T3 nuclear receptor. Using in organello import experiments, we found that p43 is targeted to the organelle by an unusual process similar to that previously reported for MTF1, a yeast mitochondrial transcription factor. DNA-binding experiments demonstrated that p43 specifically binds to four mitochondrial DNA sequences with a high similarity to nuclear T3 response elements (mt-T3REs). Using in organello transcription experiments, we observed that p43 increases the levels of both precursor and mature mitochondrial transcripts and the ratio of mRNA to rRNA in a T3-dependent manner. These events lead to stimulation of mitochondrial protein synthesis. In transient-transfection assays with reporter genes driven by the mitochondrial D loop or two mt-T3REs located in the D loop, p43 stimulated reporter gene activity only in the presence of T3. All these effects were abolished by deletion of the DNA-binding domain of p43. Finally, p43 overexpression in QM7 cells increased the levels of mitochondrial mRNAs, thus indicating that the in organello influence of p43 was physiologically relevant. These data reveal a novel hormonal pathway functioning within the mitochondrion, involving a truncated form of a nuclear receptor acting as a potent mitochondrial T3-dependent transcription factor.