Frataxin is an essential mitochondrial protein whose reduced expression causes Friedreich's ataxia (FRDA), a lethal neurodegenerative disease. It is believed that frataxin is an iron chaperone that participates in iron metabolism. We have tested this hypothesis using the bacterial frataxin ortholog, CyaY, and different biochemical and biophysical techniques. We observe that CyaY participates in iron-sulfur (Fe-S) cluster assembly as an iron-dependent inhibitor of cluster formation, through binding to the desulfurase IscS. The interaction with IscS involves the iron binding surface of CyaY, which is conserved throughout the frataxin family. We propose that frataxins are iron sensors that act as regulators of Fe-S cluster formation to fine-tune the quantity of Fe-S cluster formed to the concentration of the available acceptors. Our observations provide new perspectives for understanding FRDA and a mechanistic model that rationalizes the available knowledge on frataxin.