Although ribonucleases H (RNases H) have long been implicated in DNA metabolism, they are not required for viability in prokaryotes or unicellular eukaryotes. We generated Rnaseh1(-/-) mice to investigate the role of RNase H1 in mammals and observed developmental arrest at E8.5 in null embryos. A fraction of the mainly nuclear RNase H1 was targeted to mitochondria, and its absence in embryos resulted in a significant decrease in mitochondrial DNA content, leading to apoptotic cell death. This report links RNase H1 to generation of mitochondrial DNA, providing direct support for the strand-coupled mechanism of mitochondrial DNA replication. These findings also have important implications for therapy of mitochondrial dysfunctions and drug development for the structurally related RNase H of HIV.