A subset of mitochondrial tRNAs (mt-tRNAs) contains taurine-derived modifications at 34U of the anticodon. Loss of taurine modification has been linked to the development of mitochondrial diseases, but the molecular mechanism is still unclear. Here, we showed that taurine modification is catalyzed by mitochondrial optimization 1 (Mto1) in mammals. Mto1 deficiency severely impaired mitochondrial translation and respiratory activity. Moreover, Mto1-deficient cells exhibited abnormal mitochondrial morphology owing to aberrant trafficking of nuclear DNA-encoded mitochondrial proteins, including Opa1. The mistargeted proteins were aggregated and misfolded in the cytoplasm, which induced cytotoxic unfolded protein response. Importantly, application of chemical chaperones successfully suppressed cytotoxicity by reducing protein misfolding and increasing functional mitochondrial proteins in Mto1-deficient cells and mice. Thus, our results demonstrate the essential role of taurine modification in mitochondrial translation and reveal an intrinsic protein homeostasis network between the mitochondria and cytosol, which has therapeutic potential for mitochondrial diseases. Taurine modification of mitochondrial tRNA is associated with mitochondrial disease. Fakruddin et al. find that taurine modification is indispensable for mitochondrial protein translation. The authors also find that deficiency of taurine modification impairs a mitochondrial-cytosolic proteostatic network through an Opa1-dependent mechanism and demonstrate the therapeutic potential of chemical chaperones.