The yeast mitochondrial degradosome (mtEXO) is an NTP-dependent exoribonuclease involved in mitochondrial RNA metabolism. Previous purifications suggested that it was composed of three subunits. Our results suggest that the degradosome is composed of only two large subunits: an RNase and a RNA helicase encoded by nuclear genes DSS1 and SUV3, respectively, and that it co-purifies with mitochondrial ribosomes. We have found that the purified degradosome has RNA helicase activity that precedes and is essential for exoribonuclease activity of this complex. The degradosome RNase activity is necessary for mitochondrial biogenesis but in vitro the degradosome without RNase activity is still able to unwind RNA. In yeast strains lacking degradosome components there is a strong accumulation of mitochondrial mRNA and rRNA precursors not processed at 3'- and 5'-ends. The observed accumulation of precursors is probably the result of lack of degradation rather than direct inhibition of processing. We suggest that the degradosome is a central part of a mitochondrial RNA surveillance system responsible for degradation of aberrant and unprocessed RNAs.