<title>Author Summary</title> <p>Cellular variability has been found to play a major role in diverse and important phenomena, including stem cell differentiation and drug resistance, but the sources of this variability have yet to be satisfactorily explained. We propose a mechanism, supported by a substantial number of recent and new experiments, by which cell-to-cell differences in both the number and functionality of mitochondria – the organelles responsible for energy production in eukaryotes – leads to variability in transcription rate between cells and may hence be a significant source of cellular noise in many downstream processes. We illustrate the downstream effect of mitochondrial variability through simulated studies of protein expression and stem cell differentiation, and suggest possible experimental approaches to further elucidate this mechanism.</p>