Glutathione (GSH) is a key redox buffer and protectant. Growth (approx. one or two divisions) of cells lacking γ-glutamylcysteine synthetase (gsh1) in the absence of GSH led to irreversible respiratory incompetency in all cells, and after five divisions 75% of cells completely lacked mitochondrial DNA (mtDNA). The level of GSH required to allow continuous growth was distinct from that required to prevent loss of mtDNA. GSH limitation led to a change in the transcript levels of 190 genes, including 30 genes regulated by the Aft1p and/or Aft2p transcription factors, which regulate the cellular response to changes in iron availability. Disruption of AFT1 but not AFT2 in gsh1 cells afforded a protective effect on maintenance of respiratory competency, as did overexpression of GRX3 or GRX4 (encoding monothiol glutaredoxins that act as negative regulators of Aft1p). Importantly, an iron-independent mechanism (~30%) was also observed to mediate GSH-dependent mtDNA loss. Analysis of the redox environment in the cytosol, mitochondrial matrix, and intermembrane space (IMS) found that the cytosol was most severely and rapidly affected by GSH depletion. GSH may also modulate the redox environment of the IMS. The implications of altered GSH homeostasis for maintenance of mtDNA, compartmental redox, and the pathophysiology of certain diseases are discussed.