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Thiazolidinediones (TZDs), such as troglitazone (TRO) and rosiglitazone (ROSI), improve insulin resistance by acting as ligands for the nuclear receptor peroxisome proliferator-activated receptor-γ (PPARγ). TRO was withdrawn from the market because of reports of serious hepatotoxicity. A growing body of evidence suggests that TRO caused mitochondrial dysfunction and induction of apoptosis in human hepatocytes but its mechanisms of action remain unclear. We hypothesized that damage to mitochondrial DNA (mtDNA) is an initiating event involved in TRO-induced mitochondrial dysfunction and hepatotoxicity. Primary human hepatocytes were exposed to TRO and ROSI. The results obtained revealed that TRO, but not ROSI at equimolar concentrations, caused a substantial increase in mtDNA damage and decreased ATP production and cellular viability. The reactive oxygen species (ROS) scavenger, N-acetyl cystein (NAC), significantly diminished the TRO-induced cytotoxicity, suggesting involvement of ROS in TRO-induced hepatocyte cytotoxicity. The PPARγ antagonist (GW9662) did not block the TRO-induced decrease in cell viability, indicating that the TRO-induced hepatotoxicity is PPARγ-independent. Furthermore, TRO induced hepatocyte apoptosis, caspase-3 cleavage and cytochrome c release. Targeting of a DNA repair protein to mitochondria by protein transduction using a fusion protein containing the DNA repair enzyme Endonuclease III (EndoIII) from Escherichia coli, a mitochondrial translocation sequence (MTS) and the protein transduction domain (PTD) from HIV-1 TAT protein protected hepatocytes against TRO-induced toxicity. Overall, our results indicate that significant mtDNA damage caused by TRO is a prime initiator of the hepatoxicity caused by this drug.