Molecular genetics has linked mitochondrial dysfunction to the pathogenesis of Parkinson's disease by the discovery of rare, inherited mutations in gene products that associate with the mitochondria. Mutations in PTEN-induced kinase-1 (PINK1), which encodes a mitochondrial kinase, and PARKIN, encoding an E3 ubiquitin ligase, are the most frequent causes of recessive Parkinson's disease. Recent functional studies have revealed that PINK1 recruits PARKIN to mitochondria to initiate mitophagy, an important autophagic quality control mechanism that rids the cell of damaged mitochondria. PINK1 is post-translationally processed into a cleaved form whose levels are tightly regulated, although the significance of this processing is unknown. Here we demonstrate that the mitochondrial protease presenilin-associated rhomboid-like (PARL) can affect the proteolytic processing of PINK1 and that normal PINK1 localization and stability requires PARL's catalytic activity. PARL deficiency impairs PARKIN recruitment to mitochondria, suggesting PINK1's processing and localization are important in determining its interaction with PARKIN. We sequenced the PARL gene in Parkinson's disease patients and discovered a novel missense mutation in a functional domain of PARL's N-terminus. This PARL mutant is not sufficient to rescue PARKIN recruitment, suggesting that impaired mitophagy may be an underlying mechanism of disease pathogenesis in patients with PARL mutations.