A highly efficient RNA-synthesizing system with isolated HeLa cell mitochondria has been developed and characterized regarding its requirements and its products. In this system, transcription is initiated and the transcripts are processed in a way which closely reproduces the in vivo patterns. Total RNA labeling in isolated mitochondria proceeds at a constant rate for about 30 min at 37 C; the estimated rate of synthesis is at least 10 to 15% of the in vivo rate. Polyadenylation of the mRNAs is less extensive in this system than in vivo. Furthermore, compared with the in vivo situation, rRNA synthesis in vitro is less efficient than mRNA synthesis. This is apparently due to a decreased rate of transcription initiation at the rRNA promoter and probably a tendency also for premature termination of the nascent rRNA chains. The 5′-end processing of rRNA also appears to be slowed down, and it is very sensitive to the incubation conditions, in contrast to mRNA processing. It is suggested that the lower efficiency and the lability of rRNA synthesis and processing in isolated mitochondria may be due to cessation of import from the cytoplasm of ribosomal proteins that play a crucial role in these processes. The formation of the light-strand-coded RNA 18 (7S RNA) is affected by high pH or high ATP concentration differently from the overall light-strand transcription. The dissociation of the two processes may have important implications for the mechanism of formation and the functional role of this unusual RNA species. The high efficiency, initiation capacity, and processing fidelity of the in vitro RNA-synthesizing system described here make it a valuable tool for the analysis of the role of nucleocytoplasmic-mitochondrial interactions in organelle gene expression.