Reactive oxygen species (ROS) play important roles in regulating mitochondrial function, as well as in ischemia/reperfusion injury and cardioprotection. Here we show that in the absence of exogenous substrates, cardiac mitochondria have a surprisingly large capacity to phosphorylate ADP by oxidizing endogenous substrates, provided that H₂O₂ is removed in extramitochondrial environment and a reduced environment is maintained in the matrix. In isolated mitochondria without exogenous substrates, addition of catalase and the membrane permeant reducing agent N-acetyl cysteine (Nac) or ROS scavenger mercaptopropionyl glycine (MPG) significantly increased the ability to phosphorylate added ADP, as demonstrated by a) full recovery of membrane potential () and matrix volume from ADP-induced dissipation and shrinkage; b) [ADP]-dependent increased O₂ consumption; and c) enhanced rate of ATP synthesis. Removal of extramitochondrial H₂O₂ by catalase was required to stimulate endogenous substrate oxidation, as shown by the increase in O₂ consumption and . This effect was greatly enhanced by adding Nac or MPG to suppress oxidation-induced ROS increases in the matrix. Theoretical considerations as well as reversible inhibition of oxygen consumption with 3-mercaptopropionic acid and pyruvate in state 3 are consistent with these substrates being fatty acids. Under in vivo conditions in which powerful antioxidant conditions are maintained, this mechanism may be important in stimulating -oxidation and ATP production at low levels of extramitochondrial fatty acids. Disabling this mechanism may potentially contribute to mitochondrial dysfunction during oxidative stress.