ABSTRACTOf the four separate PE biosynthetic pathways in eukaryotes, one occurs in the mitochondrial inner membrane (IM) and is executed by phosphatidylserine decarboxylase (Psd1p). Deletion of Psd1, which is lethal in mice, compromises mitochondrial function. We hypothesize that this reflects inefficient import of non-mitochondrial PE into the IM. To test this, we re-wired PE metabolism in yeast by re-directing Psd1p to the outer mitochondrial membrane or the endomembrane system. Our biochemical and functional analyses identified the IMS as the greatest barrier for PE import and demonstrated that PE synthesis in the IM is critical for cytochromebc1complex (III) function. Importantly, mutations predicted to disrupt a conserved PE-binding site in the complex III subunit, Qcr7p, impaired complex III activity similar toPSD1deletion. Collectively, these data demonstrate that PE made in the IM by Psd1p is critical to support the intrinsic functionality of complex III and establish one likely mechanism.