Despite the crucial importance of mitochondrial transcription, knowledge of its regulation is poor. Therefore, characterization of mammalian mitochondrial transcription termination factor (mTERF) functionality and regulation is of fundamental biological interest in order to understand the regulation of mitochondrial transcription. Here we report that mTERF is the first protein having a role in mammalian mitochondrial gene expression that appears to be controlled by phosphorylation. Recombinant mature rat mTERF protein has specific DNA-binding capacity for the sequence required for transcription termination. Furthermore, unlike recombinant human mTERF, the rat protein bound to its mitochondrial DNA binding site promotes the termination of transcription initiated with heterologous RNA polymerase. Interestingly, mTERF is a phosphoprotein with four phosphate groups, and while the DNA-binding activity of mTERF is unaffected by the phosphorylation/dephosphorylation state, only the phosphorylated form of the protein is active for termination activity. Moreover, natural human mTERF is also a phosphoprotein and its termination activity is inhibited by dephosphorylation. These data suggest that mTERF functioning in vivo is regulated by phosphorylation.