Mitochondria perform vital biosynthetic processes, including fatty acid synthesis and iron-sulfur (FeS) cluster biogenesis. In Saccharomyces cerevisiae mitochondria, the acyl carrier protein Acp1 participates in type II fatty acid synthesis, requiring a 4-phosphopantetheine (PP) prosthetic group. Acp1 also interacts with the mitochondrial FeS cluster assembly complex that contains the cysteine desulfurase Nfs1. Here we investigated the role of Acp1 in FeS cluster biogenesis in mitochondria and cytoplasm. In the Acp1-depleted (Acp1↓) cells, biogenesis of mitochondrial FeS proteins was impaired, likely due to greatly reduced Nfs1 protein and/or its persulfide-forming activity. Formation of cytoplasmic FeS proteins was also deficient, suggesting a disruption in generating the (Fe-S)int intermediate, that is exported from mitochondria and is utilized for cytoplasmic FeS cluster assembly. Iron homeostasis was perturbed, with enhanced iron uptake into the cells and accumulation of iron in mitochondria. The Δppt2 strain, lacking the mitochondrial ability to add PP to Acp1, phenocopied the Acp1↓ cells. These data suggest that the holo form of Acp1 with the PP-conjugated acyl chain is required for stability of the Nfs1 protein and/or stimulation of its persulfide-forming activity. Thus, mitochondria lacking Acp1 (or Ppt2) cannot support FeS cluster biogenesis in mitochondria or cytoplasm, leading to disrupted iron homeostasis.