Loss of the mitochondrial genome (rho0 cell) or elimination of the mitochondrial inner membrane protein Oxa1p causes a dramatic increase in expression of the ATP-binding cassette transporter-encoding gene PDR5 in the yeast Saccharomyces cerevisiae. This increase in gene expression occurs via activation of the function of the Cys6-Zn(II)2 cluster transcription factor Pdr3p which in turn autoregulates expression of its structural gene. Surprisingly, the acquisition of PDR5-dependent multidrug resistance occurs at a very high frequency, consistent with the appearance of rho- cells in a fermentatively growing culture (~2%). The degree of activation of Pdr3p target genes was found to vary considerably and to be influenced by the presence of the homologous protein, Pdr1p. Mutagenesis and overexpression studies provided evidence that the control of Pdr3p expression was the major control point of this transcription factor by mitochondrial retrograde signalling. Since both rho0 and oxa1 mutant cells have multiple defects, including loss of normal respiratory chain function and oxidative phosphorylation, a series of mutant strains with more selective defects in mitochondrial function was employed to identify the molecular signal that triggers PDR5 transcriptional activation. Only mutations that influenced the level of the Fo subunit of the mitochondrial ATPase were found to lead to activation of PDR5 expression.