Malonyl-CoA is a key intermediate in a number of metabolic processes associated with its role as a substrate in acylation and condensation reactions. These types of reactions occur in plastids, the cytosol and mitochondria, and although carboxylation of acetyl-CoA is the known mechanism for generating the former two distinct pools, metabolic origin of the mitochondrial malonyl-CoA pool is still unclear. In this study we demonstrate that malonyl-CoA synthetase encoded by the Arabidopsis AAE13 (AT3G16170) gene is dual-localized, in the cytosol and mitochondria. These proteins are translated from two types of transcripts, one that encompasses and one that does not encompass a mitochondrial targeting presequence. Whereas the cytosolically localized AAE13 protein is probably not essential due to the presence of a redundant malonyl-CoA generating system provided by a cytosolic acetyl-CoA carboxylase, the mitochondrially localized AAE13 protein is essential for plant growth. Phenotypes of aae13-1 mutant are transgenically reversed only if the mitochondrial presequence is present in the ectopically expressed AAE13 proteins. The aae13- 1 mutant exhibits typical metabolic phenotypes associated with a deficiency in the mitochondrial fatty acid synthase system, namely depleted lipoylation of the H subunit of the photorespiratory enzyme glycine decarboxylase, increased accumulation of glycine and glycolate, and reduced levels of sucrose. Most of these metabolic alterations, and associated morphological changes, are reversed when the aae13-1 mutant is grown in a non-photorespiratory condition (i.e. 1% CO2 atmosphere), demonstrating that they are a consequence of the deficiency in photorespiration due to the inability to generate lipoic acid from mitochondrially synthesized fatty acids.