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Mitochondria have long been known to accumulate Ca2+; the apparent inconsistency between the low affinity of mitochondrial Ca2+ uptake mechanisms, the low concentration of global Ca2+ signals observed in cytoplasm, and the efficiency in intact cells of mitochondrial Ca2+ uptake led to the formulation of the "hotspot hypothesis." This hypothesis proposes that mitochondria preferentially accumulate Ca2+ at microdomains of elevated Ca2+ concentration ([Ca2+]) that exist near endoplasmic reticulum (ER) Ca2+ release sites and other Ca2+ channels. Physiological Ca2+ signals may affect mitochondrial function--both by stimulating key metabolic enzymes and, under some conditions, by promoting apoptosis. Mitochondria in turn may affect both Ca2+ release from the ER and capacitative Ca2+ entry across the plasma membrane, thereby shaping the size and duration of the intracellular Ca2+ signal. Interactions between mitochondria and the ER are critically dependent on the spatial localization of mitochondria within the cell. The molecular mechanisms that define the organization of mitochondria with regard to the ER and other Ca2+ sources, and the extent to which mitochondrial function varies among different cell types, are open questions whose answers remain to be determined.