Polymerase delta interacting protein 38 (PDIP38) was identified as a human DNA polymerase (pol) delta interacting protein through a direct interaction with p50, the small subunit of human pol delta. PDIP38 was also found to interact with proliferating cell nuclear antigen, which suggested that it might play a role in vivo in the processes of DNA replication and DNA repair in the nucleus. In order to characterize further this novel protein, we have examined its subcellular localization by the use of immunochemical and cellular fractionation techniques. These studies show that PDIP38 is a novel mitochondrial protein and is localized mainly to the mitochondria. PDIP38 was shown to possess a functional mitochondrial targeting sequence that is located within the first 35 N-terminal amino acid residues. The mature PDIP38 protein is about 50 amino acid residues smaller than the full-length precursor PDIP38 protein, consistent with it being processed by cleavage of the mitochondrial targeting sequence during entry into the mitochondria. His-tagged mature PDIP38 inhibited pol delta activity in vitro and interacted with human papillomavirus 16 E7 oncoprotein, suggesting that PDIP38 might play a role in the pol delta-mediated viral DNA replication. Although the localization of PDIP38 to the mitochondria suggests that it serves functions within the mitochondria, we cannot eliminate the possibility that it may be involved in pol delta-mediated DNA replication or DNA repair under certain conditions such as viral infection.