DNA repair capacity of eukaryotic cells has been studied extensively in recent years. Mammalian cells have been engineered to overexpress recombinant nuclear DNA repair proteins from ectopic genes to assess the impact of increased DNA repair capacity on genome stability. This approach has been used in this study to specifically target O⁶-methylguanine DNA methyltransferase (MGMT) to the mitochondria and examine its impact on cell survival after exposure to DNA alkylating agents. Survival of human hematopoietic cell lines and primary hematopoietic CD34⁺ committed progenitor cells was monitored because the baseline repair capacity for alkylation-induced DNA damage is typically low due to insufficient expression of MGMT. Increased DNA repair capacity was observed when K562 cells were transfected with nuclear-targeted MGMT (nucl-MGMT) or mitochondrial-targeted MGMT (mito-MGMT). Furthermore, overexpression of mito-MGMT provided greater resistance to cell killing by 1,3-bis (2-chloroethyl)-1-nitrosourea (BCNU) than overexpression of nucl-MGMT. Simultaneous overexpression of mito-MGMT and nucl-MGMT did not enhance the resistance provided by mito-MGMT alone. Overexpression of either mito-MGMT or nucl-MGMT also conferred a similar level of resistance to methyl methanesulfonate (MMS) and temozolomide (TMZ) but simultaneous overexpression in both cellular compartments was neither additive nor synergistic. When human CD34⁺ cells were infected with oncoretroviral vectors that targeted O⁶-benzylguanine (6BG)–resistant MGMT (MGMT^P140K) to the nucleus or the mitochondria, committed progenitors derived from infected cells were resistant to 6BG/BCNU or 6BG/TMZ. These studies indicate that mitochondrial or nuclear targeting of MGMT protects hematopoietic cells against cell killing by BCNU, TMZ, and MMS, which is consistent with the possibility that mitochondrial DNA damage and nuclear DNA damage contribute equally to alkylating agent–induced cell killing during chemotherapy.