The regulation and function of the crucial cell cycle regulator cyclin E (CycE) remains elusive. Unlike other cyclins, CycE can be uniquely controlled by mitochondrial energetics, the exact mechanism being unclear. Using mammalian cells (in vitro) and Drosophila (in vivo) model systems in parallel, we show that CycE can be directly regulated by mitochondria through its recruitment to the organelle. Active mitochondrial bioenergetics maintains a distinct mitochondrial pool of CycE (mtCycE) lacking a key phosphorylation required for its degradation. Loss of the mitochondrial fission protein dynamin-related protein 1 (Drp1, SwissProt O00429 in humans) augments mitochondrial respiration and elevates the mtCycE pool allowing CycE deregulation, cell cycle alterations and enrichment of stem cell markers. Such CycE deregulation after Drp1 loss attenuates cell proliferation in low-cell-density environments. However, in high-cell-density environments, elevated MEK-ERK signaling in the absence of Drp1 releases mtCycE to support escape of contact inhibition and maintain aberrant cell proliferation. Such Drp1-driven regulation of CycE recruitment to mitochondria might be a mechanism to modulate CycE degradation during normal developmental processes as well as in tumorigenic events.