Mevalonate pathway enzyme activities in rat liver mitochondria were investigated, and it was found that isopentenyl pyrophosphate can be utilized for the synthesis of all-trans-polyprenyl pyrophosphates in vitro. In this reaction sequence intermediate formation of farnesyl pyrophosphate (FPP) predominates, and the FPP synthase activity was studied in more detail. The mitochondrial activity constitutes 13% of the total hepatic capacity for FPP synthesis, exceeding the corresponding microsomal, nuclear, and peroxisomal activities by 10-fold. Mitochondrial FPP synthase exhibits trypsin sensitivity only after sonication of intact mitochondria and upon subfractionation the activity is found localized in the matrix. FPP synthase activities at different locations responded distinctly when rats were treated with a diet enriched in cholesterol or containing mevinolin or cholestyramine. With the high cholesterol diet, mitochondrial FPP synthase activity increased 2-fold, while the cytosolic activity was slightly decreased. Both mevinolin and cholestyramine treatment resulted in 3-fold increases in cytosolic FPP synthase activities, without altering the mitochondrial activity. FPP was utilized as substrate for trans-prenyltransferase activity in the inner mitochondrial membrane. The products formed in this reaction were identified as nona- and decaprenyl-PP, and the reaction was influenced by changes in both substrate and Mg2+ concentration, giving more decaprenyl-PP when the concentrations of these substances were increased. These results demonstrate that mitochondria utilize endogenously produced FPP for isoprenoid biosynthesis and that the biosynthetic steps in mitochondria are regulated independently from those occurring in other subcellular compartments.