The mechanism of selective protein degradation of membrane proteins in mitochondria has been studied employing a model protein that is subject to rapid proteolysis within the inner membrane. Protein degradation was mediated by two different proteases: (i) the m-AAA protease, a protease complex consisting of multiple copies of the ATP-dependent metallopeptidases Yta1Op (Afg3p) and Yta12p (Rcalp); and (ii) by Ymelp (Ytallp) that also is embedded in the inner membrane. Ymelp, highly homologous to Yta1Op and Yta12p, forms a complex of approximately 850 kDa in the inner membrane and exerts ATP-dependent metallopeptidase activity. While the m-AAA protease exposes catalytic sites to the mitochondrial matrix, Ymelp is active in the intermembrane space. The Ymelp complex was therefore termed 'i-AAA protease'. Analysis of the proteolytic fragments indicated cleavage of the model polypeptide at the inner and outer membrane surface and within the membrane-spanning domain. Thus, two AAA proteases with their catalytic sites on opposite membrane surfaces constitute a novel proteolytic system for the degradation of membrane proteins in mitochondria.