Coordinate regulation of PARP-1 and -2 and PARG is required for cellular responses to genotoxic stress. While PARP-1 and -2 are regulated by DNA breaks and covalent modifications, mechanisms of PARG regulation are poorly understood. We report here discovery of a PARG regulatory segment far removed linearly from residues involved in catalysis. Expression and analysis of human PARG segments identified a minimal catalytically active C-terminal PARG (hPARG59) containing a 16-residue N-terminal mitochondrial targeting sequence (MTS). Deletion analysis and site-directed mutagenesis revealed that the MTS, specifically hydrophobic residues L473 and L474, was required for PARG activity. This region of PARG was termed the "regulatory segment/MTS" (REG/MTS). The overall alpha-helical composition of hPARG59, determined by circular dichroism (CD), was unaffected by mutation of the REG/MTS leucine residues, suggesting that activity loss was not due to incorrect protein folding. REG/MTS was predicted to be in a loop conformation because the CD spectra of mutant Delta1-16 lacking the REG/MTS showed a higher alpha-helical content than hPARG59, indicating a secondary structure other than alpha-helix for this segment. Deletion of the REG/MTS from full-length hPARG111 also resulted in a complete loss of activity, indicating that all PARG isoforms are subject to regulation at this site. The presence of the REG/MTS raises the possibility that PARG activity is regulated by interactions of PARP-1 and -2 and other proteins at this site, raises interesting questions concerning mitochondrial PARG because MTS residues are often removed after transport, and offers a potentially novel site for drug targeting of PARG.