Steroidogenic acute regulatory protein (StAR) facilitates delivery of cholesterol to the inner mitochondrial membranes. StAR is imported into mitochondria and processed to a mature form by cleavage of the N-terminal mitochondrial targeting sequence. We produced His-tagged (His-tag StAR) constructs lacking the N-terminal 62 amino acids that encode the mitochondrial targeting sequence and examined their steroidogenic activity in intact cells and on isolated mitochondria. His-tag StAR proteins stimulated pregnenolone synthesis to the same extent as wild-type StAR when expressed in COS-1 cells transfected with the cholesterol side-chain cleavage system. His-tag StAR was diffusely distributed in the cytoplasm of transfected COS-1 cells, whereas wild-type StAR was localized to mitochondria. There was no evidence at the light or electron microscope levels for selective localization of His-tag StAR protein to mitochondrial membranes. We established an assay system using mitochondria isolated from bovine corpora lutea and purified recombinant His-tag StAR proteins expressed in E. coli. Recombinant His-tag StAR stimulated pregnenolone production in a dose- and time-dependent manner, functioning at nanomolar concentrations. A point mutant of StAR (A218V) that causes lipoid congenital adrenal hyperplasia was incorporated into the His-tag protein. This mutant was steroidogenically inactive in COS-1 cells and on isolated mitochondria. Our observations conclusively document that StAR acts on the outside of mitochondria, independent of mitochondrial import.