Allelic mutants exhibiting growth defects in Drosophila were isolated. Molecular cloning identified the responsible gene as a budding yeast Tim50 ortholog, and thus it was named tiny tim 50 (ttm50). The weak allele (ttm50(Gp99)) produced small flies due to reduced cell size and number, and growth terminated at the larval stage in the strong alleles (ttm50(IE1) and ttm50(IE2)). Twin-spot analysis showed fewer cells in ttm50(Gp99) clones, whereas ttm50(IE1) clones did not proliferate, suggesting that the gene has an essential cellular function. Tim50 is known to maintain mitochondrial membrane potential (MMP) while facilitating inner-membrane protein transport. We found that tagged Ttm50 also localized to mitochondria and that mitochondrial morphology and MMP were affected in mutants, indicating that mitochondrial dysfunction causes the developmental phenotype. Conversely, ttm50 overexpression increased MMP and apoptosis. Co-expression of p35 suppressed this apoptosis, resulting in cell overproliferation. Interestingly, ttm50 transcription was tissue specific, corresponding to elevated MMP in the larval midgut, which was decreased in the mutant. The correlation of ttm50 expression levels with differences in MMP match its proposed role in mitochondrial permeability barrier maintenance. Thus a mitochondrial protein translocase component can play active roles in regulating metabolic levels, possibly for modulation of physiological function or growth in development.