We present a study investigating the role of mitochondrial variability in generating noise in eukaryotic cells. Noise in cellular physiology plays an important role in many fundamental cellular processes, including transcription, translation, stem cell differentiation and response to medication, but the specific random influences that affect these processes have yet to be clearly elucidated. Here we present a mechanism by which variability in mitochondrial volume and functionality, along with cell cycle dynamics, is linked to variability in transcription rate and hence has a profound effect on downstream cellular processes. Our model mechanism is supported by an appreciable volume of recent experimental evidence, and we present the results of several new experiments with which our model is also consistent. We find that noise due to mitochondrial variability can sometimes dominate over other extrinsic noise sources (such as cell cycle asynchronicity) and can significantly affect large-scale observable properties such as cell cycle length and gene expression levels. We also explore two recent regulatory network-based models for stem cell differentiation, and find that extrinsic noise in transcription rate causes appreciable variability in the behaviour of these model systems. These results suggest that mitochondrial and transcriptional variability may be an important mechanism influencing a large variety of cellular processes and properties.