The human gene POLG encodes the catalytic subunit of mitochondrial DNA polymerase, but its precise roles in mtDNA metabolism in vivo have not hitherto been documented. By expressing POLG fusion proteins in cultured human cells, we show that the enzyme is targeted to mitochondria, where the Myc epitope-tagged POLG is catalytically active as a DNA polymerase. Long-term culture of cells expressing wild-type POLG-myc revealed no alterations in mitochondrial function. Expression of POLG-myc mutants created dominant phenotypes demonstrating important roles for the protein in mtDNA maintenance and integrity. The D198A amino acid replacement abolished detectable 3'-5' (proofreading) exonuclease activity and led to the accumulation of a significant load (1:1700) of mtDNA point mutations during 3 months of continuous culture. Further culture resulted in the selection of cells with an inactivated mutator polymerase, and a reduced mutation load in mtDNA. Transient expression of POLG-myc variants D890N or D1135A inhibited endogenous mitochondrial DNA polymerase activity and caused mtDNA depletion. Deletion of the POLG CAG repeat did not affect enzymatic properties, but modestly up-regulated expression. These findings demonstrate that POLG exonuclease and polymerase functions are essential for faithful mtDNA maintenance in vivo, and indicate the importance of key residues for these activities.