In mammals, lipoate-activating enzyme (LAE) catalyzes the activation of lipoate to lipoyl-nucleoside monophosphate. The lipoyl moiety is then transferred to the specific lysine residue of lipoate-dependent enzymes by the action of lipoyltransferase. We purified LAE from bovine liver mitochondria to apparent homogeneity. LAE activated lipoate with GTP at a 1000-fold higher rate than with ATP. The reaction absolutely required lipoate, GTP, and Mg(2+) ion, and the reaction product was lipoyl-GMP. LAE activated both (R)- and (S)-lipoate to the respective lipoyl-GMP, although a preference for (R)-lipoate was observed. Similarly, lipoyltransferase equally transferred both the (R)- and (S)-lipoyl moieties from the respectively activated lipoates to apoH-protein. Interestingly, however, only H-protein carrying (R)-lipoate was active in the glycine cleavage reaction. cDNA clones encoding a precursor LAE with a mitochondrial presequence were isolated. The predicted amino acid sequence of LAE is identical with that of xenobiotic-metabolizing/medium-chain fatty acid:CoA ligase-III, but an amino acid substitution due to a single nucleotide polymorphism was found. These results indicate that the medium-chain acyl-CoA synthetase in mitochondria has a novel function, the activation of lipoate with GTP.