The genome of the yeast Saccharomyces cerevisiae encodes the essential protein Nar1p that is conserved in virtually all eukaryotes and exhibits striking sequence similarity to bacterial iron-only hydrogenases. Previously, we have shown that Nar1p is an Fe-S protein and that assembly of its co-factors depends on the mitochondrial Fe-S cluster biosynthesis apparatus. Using functional studies in vivo, we demonstrated that Nar1p has an essential role in the maturation of cytosolic and nuclear, but not of mitochondrial, Fe-S proteins. Here we provide further spectroscopic evidence that Nar1p possesses two Fe-S clusters. We also show that Nar1p is required for Fe-S cluster assembly on the P-loop NTPase Nbp35p, another newly identified component of the cytosolic Fe-S protein assembly machinery. These data suggest a complex biochemical pathway of extra-mitochondrial Fe-S protein biogenesis involving unique eukaryotic proteins.