Allelic deletions on human chromosome 12q24 are frequently reported in a variety of malignant neoplasms, indicating the presence of a tumor suppressor gene(s) in this chromosomal region. However, no reasonable candidate has been identified so far. In this study, we report the cloning and functional characterization of a novel mitochondrial protein with tumor suppressor activity, henceforth designated MITOSTATIN. Human MITOSTATIN was found within a 3.2-kb transcript, which encoded a approximately 62 kDa, ubiquitously expressed protein with little homology to any known protein. We found homozygous deletions and mutations of MITOSTATIN gene in approximately 5 and approximately 11% of various cancer-derived cells and solid tumors, respectively. When transiently overexpressed, MITOSTATIN inhibited colony formation, tumor cell growth and was proapoptotic, all features shared by established tumor suppressor genes. We discovered a specific link between MITOSTATIN overexpression and downregulation of Hsp27. Conversely, MITOSTATIN knockdown cells showed an increase in cell growth and cell survival rates. Finally, MITOSTATIN expression was significantly reduced in primary bladder and breast tumors, and its reduction was associated with advanced tumor stages. Our findings support the hypothesis that MITOSTATIN has many hallmarks of a classical tumor suppressor in solid tumors and may play an important role in cancer development and progression.