Mitochondrial DNA (mtDNA) stability, essential for cellular energy production, relies on DNA polymerase gamma (POLgamma). Here, we show that the POLgamma Y951N disease causing mutation induces replication stalling and severe mtDNA depletion. However, unlike other POLgamma disease causing mutations, Y951N does not directly impair exonuclease activity and only mildly affects polymerase activity. Instead, we found that Y951N compromises the enzymes ability to efficiently toggle between DNA synthesis and degradation, and is thus the first patient-derived mutation with impaired polymerase-exonuclease switching. These findings provide new insights into the intramolecular switch when POLgamma proofreads the newly-synthesized DNA strand, and reveal a new mechanism for causing mitochondrial DNA instability.