IEX-1 (Immediate Early response gene X-1) is a stress-inducible gene. It suppresses production of reactive oxygen species (ROS) and protects cells from apoptosis induced by a wide range of stimuli, but the underlying mechanism is not known. This study reveals that IEX-1 targets the mitochondrial F1Fo-ATPase Inhibitor (IF1) for degradation, resulting in acceleration of ATP hydrolysis, concomitant with reduction in ROS production. A prominent role for IF1 degradation in the function of IEX-1 was corroborated by siRNA-mediated gene silencing of IF1 that recapitulated the effects of IEX-1 on ATP hydrolysis and ROS production. Moreover, progressive C-terminal truncation studies demonstrated that IEX-1 interacted with the C terminus of IF1 and the interaction might render IF1 prone to degradation by an as yet unidentified mitochondrial protease. In support of a physiological importance of IEX-1 in the modulation of IF1 expression, gene-targeted deletion of IEX-1 stabilized IF1 and reduced mitochondrial F1Fo-ATPase activity in vivo. The altered activity of the F1Fo enzyme may account for a metabolic switch from oxidative phosphorylation toward glycolysis in IEX-1 deficient cells. Thus, IEX-1 deficient cells were more susceptible to glucose deprivation than wild type counterparts and displayed increased glucose uptake and lactate production in hypoxic conditions. The cells were also relatively refractory to oligomycin-mediated inhibition of ATP production. The studies offer novel insights into the primary role of IEX-1 in regulating a balance between energy provision and ROS production.