We have previously demonstrated that steroidogenic acute regulatory protein (StAR) is essential for the rate-limiting step in the acute regulation of steroidogenesis, which is the transport of cholesterol from the outer to the inner mitochondrial membrane. We have hypothesized that this transport occurs as the 37-kilodalton (kDa) precursor form of StAR is imported into the mitochondria and processed to its 30-kDa mature forms. Using an in vitro transcription and translation system in the presence of mitochondria isolated from unstimulated mouse MA-10 Leydig tumor cells, we now directly show that the 37-kDa form is indeed the cytosolic precursor of StAR and can be processed by mitochondria to all four 30-kDa mature forms. To determine the subcellular location of StAR in steroidogenic cells, ultrastructural immunocytochemistry was performed in adrenal zona fasciculata cells using the protein A-gold technique. We show that StAR is associated exclusively with the mitochondria. There, StAR is primarily localized in the intermembrane space and the intermembrane space side of the cristae membrane. StAR was shown to induce steroid production in isolated mitochondria. StAR protein was expressed in COS1 cells and the cell lysate, which was shown to contain abundant levels of StAR by Western blot analysis, was incubated with mitochondria isolated from unstimulated MA-10 cells. In these experiments, StAR increased steroid production by at least 4-fold over control mock-transfected lysate, and this increase was time and dose dependent. Furthermore, the increase in steroid production induced by StAR-containing lysate was not observed when COS1 lysate containing high levels of another mitochondrially imported protein, adrenodoxin, was used. We conclude from these results that in response to tropic hormone stimulation of steroidogenic cells, StAR is synthesized as a 37-kDa precursor, imported into the mitochondria, processed to its 30-kDa mature forms, and localized to the intermembrane space. During import and processing in vitro, StAR induces steroid production in isolated mitochondria in a specific manner.