The concentration of ATP generated by yeast mitochondria and consumed by yeast hexokinase was monitored using native firefly luciferase in solution, or recombinant luciferase localized at the surface of mitochondria. In the absence of hexokinase, both probes perform similarly in detecting exogenous or mitochondrially-generated ATP. The steady-state concentrations of ATP can be reduced in a dose-dependent manner by hexokinase. With hexokinase added in large excess, the localized probe reports substantial ATP concentrations while none is detectable by soluble luciferase. Thus, ATP accumulates near the membrane where it appears, relatively to solution, and vice versa for ADP. The extent of nucleotide gradients is shown to be correlated with the specific activity of oxidative phosphorylation and with the viscosity of the medium, but independent of the concentration of the organelles. A simple model involving diffusional restrictions is presented to describe this behavior. The metabolic and evolutionary implications of cellular catalysis limitation by physical processes are discussed.