delta-Aminolevulinate synthase, the first enzyme in the heme biosynthetic pathway, is encoded by the nuclear gene HEM1. The enzyme is synthesized as a precursor in the cytoplasm and imported into the matrix of the mitochondria, where it is processed to its mature form. Fusions of beta-galactosidase to various lengths of amino-terminal fragments of delta-aminolevulinate synthase were constructed and transformed into yeast cells. The subcellular location of the fusion proteins was determined by organelle fractionation. Fusion proteins were found to be associated with the mitochondria. Protease protection experiments involving the use of intact mitochondria or mitoplasts localized the fusion proteins to the mitochondrial matrix. This observation was confirmed by fractionation of the mitochondrial compartments and specific activity measurements of beta-galactosidase activity. The shortest fusion protein contains nine amino acid residues of delta-aminolevulinate synthase, indicating that nine amino-terminal residues are sufficient to localize beta-galactosidase to the mitochondrial matrix. The amino acid sequence deduced from the DNA sequence of HEM1 showed that the amino-terminal region of delta-aminolevulinate synthase was largely hydrophobic, with a few basic residues interspersed.