The yeast ATM1 gene is essential for normal cellular iron homeostasis. Deletion of ATM1 results in mitochondrial iron accumulation and increased sensitivity to oxidative stress and transition metal toxicity. Atm1p is an ATP-binding cassette (ABC) transporter localized to the mitochondrial inner membrane. The specific function of Atm1p has not been determined, though roles in both mitochondrial iron export and cytosolic Fe-S cluster assembly have been proposed. We undertook a screen for yeast genes capable of suppressing the abnormalities of cellular iron metabolism demonstrated by Deltaatm1 cells. One of the genes we identified was MDL1, which like ATM1, encodes a mitochondrial inner membrane ABC transporter. Mdl1p has previously been shown to function in the export of peptides from the mitochondrial matrix. We demonstrate that over-expression of MDL1 in Deltaatm1 cells results in a reduction of mitochondrial iron content, and decreased sensitivity to H(2)O(2) and transition metal toxicity. Additionally, in studies of the effect of over-expression and deletion of MDL1, we have identified a novel role for Mdl1p in the regulation of cellular resistance to oxidative stress.