The grpE gene is a heat shock gene of Escherichia coli whose product functions as a chaperone to (re)fold proteins. We found a yeast homologue of grpE and designated it YGE1. YGE1 can replace grpE in E. coli, indicating that YGE1 is a functional homologue of grpE. Deletion of YGE1 is lethal. During depletion of the Yge1 product, mitochondria are sequestered in mother cells thereby accumulating cells without mitochondria, suggesting that Yge1 protein plays a pivotal role in maintaining mitochondrial functions.