Prohibitins in eukaryotes consist of two subunits (PHB1 and PHB2) that together form a high molecular weight complex in the mitochondrial inner membrane. The evolutionary conservation and the ubiquitous expression in mammalian tissues of the prohibitin complex suggest an important function among eukaryotes. The PHB complex has been shown to play a role in the stabilization of newly synthesized subunits of mitochondrial respiratory enzymes in the yeast Saccharomyces cerevisiae. We have used Caenorhabditis elegans as model system to study the role of the PHB complex during development of a multicellular organism. We demonstrate that prohibitins in C. elegans form a high molecular weight complex in the mitochondrial inner membrane similar to that of yeast and humans. By using RNA-mediated gene inactivation, we show that PHB proteins are essential during embryonic development and are required for somatic and germline differentiation in the larval gonad. We further demonstrate that a deficiency in PHB proteins results in altered mitochondrial biogenesis in body wall muscle cells. This paper reports a strong loss of function phenotype for prohibitin gene inactivation in a multicellular organism and shows for the first time that prohibitins serve an essential role in mitochondrial function during organismal development.