The yeast silent information regulator (Sir)2 protein links cellular metabolism and transcriptional silencing through its nicotinamide adenine dinucleotide (NAD)-dependent histone deacetylase activity. We report that mitochondria from mammalian cells contain intrinsic NAD-dependent deacetylase activity. This activity is inhibited by the NAD hydrolysis product nicotinamide, but not by trichostatin A, consistent with a class III deacetylase. We identify this deacetylase as the nuclear-encoded human Sir2 homologue hSIRT3, and show that hSIRT3 is located within the mitochondrial matrix. Mitochondrial import of hSIRT3 is dependent on an NH 2-terminal amphipathic α-helix rich in basic residues. hSIRT3 is proteolytically processed in the mitochondrial matrix to a 28-kD product. This processing can be reconstituted in vitro with recombinant mitochondrial matrix processing peptidase (MPP) and is inhibited by mutation of arginines 99 and 100 . The unprocessed form of hSIRT3 is enzymatically inactive and becomes fully activated in vitro after cleavage by MPP. These observations demonstrate the existence of a latent class III deacetylase that becomes catalytically activated upon import into the human mitochondria.