The ATP-binding cassette (ABC) transporters constitute one of the largest families of proteins in evolution. The ATM1 gene of the yeast Saccharomyces cerevisiae encodes an ABC protein, which is localized to the mitochondrial inner membrane. A deletion of ATM1 results in the accumulation of up to a 30-fold excess of mitochondrial iron, loss of mitochondrial cytochromes and abnormalities of cytosolic iron metabolism. In this study, we have evaluated the role of conserved sequence elements in Atm1p in its function and dimerization in vivo. We report that conserved residues in the Walker A and B motifs of the nucleotide binding domain, which are required for ATP binding and hydrolysis, are essential for Atm1p function. In addition, we provide evidence that ATP binding is important for Atm1p dimerization.