Dichloroacetate (DCA) is a potential environmental hazard and an investigational drug. Repeated doses of DCA result in reduced drug clearance, probably through inhibition of glutathione transferase ζ1 (GSTZ1), a cytosolic enzyme that converts DCA to glyoxylate. DCA is known to be taken up by mitochondria, where it inhibits pyruvate dehydrogenase kinase, its major pharmacodynamic target. We tested the hypothesis that the mitochondrion was also a site of DCA biotransformation. Immunoreactive GSTZ1 was detected in liver mitochondria from humans and rats, and its identity was confirmed by liquid chromatography/tandem mass spectrometry analysis of the tryptic peptides. Study of rat submitochondrial fractions revealed GSTZ1 to be localized in the mitochondrial matrix. The specific activity of GSTZ1-catalyzed dechlorination of DCA was 2.5- to 3-fold higher in cytosol than in whole mitochondria and was directly proportional to GSTZ1 protein expression in the two compartments. Rat mitochondrial GSTZ1 had a 2.5-fold higher (App)K(m) for glutathione than cytosolic GSTZ1, whereas the (App)K(m) values for DCA were identical. Rats administered DCA at a dose of 500 mg/kg/day for 8 weeks showed reduced hepatic GSTZ1 activity and expression of ∼10% of control levels in both cytosol and mitochondria. We conclude that the mitochondrion is a novel site of DCA biotransformation catalyzed by GSTZ1, an enzyme colocalized in cytosol and mitochondrial matrix.