The mitochondrial matrix protein frataxin is depleted in patients with Friedreich's ataxia, the most common autosomal recessive ataxia. While frataxin is important for intracellular iron homeostasis, its exact cellular role is unknown. Deletion of the yeast frataxin homolog YFH1 yields mutants (Δyfh1) that, depending on the genetic background, display various degrees of phenotypic defects. This renders it difficult to distinguish primary (early) from secondary (late) consequences of Yfh1p deficiency. We have constructed a yeast strain (Gal-YFH1) that carries the YFH1 gene under the control of a galactose-regulated promoter. Yfh1p-deficient Gal-YFH1 cells are far less sensitive to oxidative stress than Δyfh1 mutants, maintain mitochondrial DNA, and synthesize heme at wild-type rates. Yfh1p depletion causes a strong reduction in the assembly of mitochondrial Fe/S proteins both in vivo and in detergent extracts of mitochondria. Impaired Fe/S protein biogenesis explains the respiratory deficiency of Gal-YFH1 cells. Furthermore, Yfh1p-depleted Gal-YFH1 cells show decreased maturation of cytosolic Fe/S proteins and accumulation of mitochondrial iron. This latter phenotype is common for defects in cytosolic Fe/S protein assembly. Together, our data demonstrate a specific role of frataxin in the biosynthesis of cellular Fe/S proteins and exclude most of the previously suggested functions. Friedreich's ataxia may therefore represent a disorder caused by defects in Fe/S protein maturation.