Mitochondrial DNA variants have previously associated with disease, but the underlying mechanisms have been largely elusive. Here, we report that mitochondrial SNP rs2853499 associated with Alzheimer’s disease (AD), neuroimaging, and transcriptomics. We mapped rs2853499 to a novel mitochondrial small open reading frame called SHMOOSE with microprotein encoding potential. Indeed, we detected two unique SHMOOSE-derived peptide fragments in mitochondria by using mass spectrometry—the first unique mass spectrometry-based detection of a mitochondrial-encoded microprotein to date. Furthermore, cerebrospinal fluid (CSF) SHMOOSE levels in humans correlated with age, CSF tau, and brain white matter volume. We followed up on these genetic and biochemical findings by carrying out a series of functional experiments. SHMOOSE acted on the brain following intracerebroventricular administration, differentiated mitochondrial gene expression in multiple models, localized to mitochondria, bound the inner mitochondrial membrane protein mitofilin, and boosted mitochondrial oxygen consumption. Altogether, SHMOOSE has vast implications for the fields of neurobiology, Alzheimer’s disease, and microproteins.