Subunit 8 (Y8), a mitochondrially encoded subunit of the F0 sector of the F1F0-ATP synthase is essential for oxidative phosphorylation. We have previously introduced the technique of allotopic expression to study the structure/function of Y8, whereby an artificial Y8 gene is expressed in the nucleus of cells lacking a functional mitochondrial Y8, thus generating assembly of a functional F1F0-ATPase complex. In this paper we show that when a gene encoding an essentially unmodified version of Y8 is allotopically expressed, ATP synthesis and hydrolysis rates, as well as efficiency of oxidative phosphorylation, were similar to those of the parental wild-type strain in which Y8 is naturally expressed in mitochondria. We then tested the requirement for the hydrophobicity of the central domain (residues 14-32), which possibly represents a transmembrane stem, by introducing adjacent negative charges at different positions of Y8. One of the variants thus generated, which carries the double substitution Leu23-->Asp, Leu24-->Asp, when expressed in a strain lacking endogenous Y8, gave rise to cells which grew very slowly by oxidative phosphorylation. Measurement of bioenergetic parameters showed two major defects in these cells relative to control cells allotopically expressing unmodified Y8. First, the activity of the F1F0-ATP synthase was significantly decreased. ATP synthesis and state 3 of respiration were reduced by approximately 30-40%. ATP hydrolysis was reduced by approximately 30% and was almost insensitive to the F0 inhibitor oligomycin. Second, the physical coupling between the two sectors of the enzyme, as well as the stability of the F1 sector itself, were affected as shown by decreased recovery of F0 sector [8, 9, b, oligomycin sensitivity-conferring protein (OSCP), d, h and f] and F1 sector (alpha, gamma, delta) subunits in immunoprecipitates of ATP synthase. This study indicates that Y8 not only performs an important role in the structure of the mitochondrial complex but also in its activity. We conclude that the hydrophobic character of amino acids 23 and 24 in the middle of the putative transmembrane stem of Y8 is essential for coupling proton transport through F0 to ATP synthesis on F1.