The yeast mitochondrial chaperonin Hsp60 has previously been implicated in mitochondrial DNA (mtDNA) transactions: it is found in mtDNA nucleoids associated with single-stranded DNA; it binds preferentially to the template strand of active mtDNA ori sequences in vitro; and wild-type (rho+) mtDNA is unstable in hsp60 temperature-sensitive (ts) mutants grown at the permissive temperature. Here we show that the mtDNA instability is caused by a defect in mtDNA transmission to daughter cells. Using high resolution, fluorescence deconvolution microscopy, we observe a striking alteration in the morphology of mtDNA nucleoids in rho+ cells of an hsp60-ts mutant that suggests a defect in nucleoid division. We show that rho- petite mtDNA consisting of active ori repeats is uniquely unstable in the hsp60-ts mutant. This instability of ori rho- mtDNA requires transcription from the canonical promoter within the ori element. Our data suggest that the nucleoid dynamics underlying mtDNA transmission are regulated by the interaction between Hsp60 and mtDNA ori sequences.