Mitofusin proteins 1 and 2 (Mfn1 and Mfn2, respectively) of the mammalian mitochondrial outer membrane are homologues of Drosophila FZO and yeast Fzo1, and both are essential for GTP-dependent mitochondrial fusion. We identified a 55-kDa Mfn-binding protein named MIB. It is a member of the medium-chain dehydrogenase/reductase protein superfamily, and has a conserved coenzyme-binding domain (CBD). The majority of MIB is localized in the cytoplasm but a small amount is associated with mitochondria. Exogenous expression of MIB in HeLa cells induced mitochondrial fragmentation, which was prevented by coexpression of Mfn1, suggesting a functional interaction of MIB with Mfn proteins; the GGVG sequence in the CBD of MIB is essential for its function. By contrast, MIB knockdown resulted in growth arrest of the cells, although apoptotic sensitivity was not affected by either its knockdown or its overexpression. Furthermore, MIB knockdown induced a large extension of mitochondrial network structures. By contrast, a double knockdown of MIB and Mfn1 resulted in mitochondrial fragmentation and reversal of the growth arrest, the morphology and growth phenotype induced by knockdown of Mfn1 alone, again suggesting that MIB modulates Mfn1 function. Together, these findings suggest that MIB is essential for cellular function by regulating mitochondrial membrane dynamics in cooperation with Mfn proteins.