Heme oxygenase-1 (HO-1), a stress-inducible enzyme anchored in the endoplasmic reticulum (ER) by a single transmembrane segment (TMS) located at the C terminus, interacts with NADPH cytochrome P450 reductase and biliverdin reductase to catalyze heme degradation to biliverdin and its metabolite, bilirubin. Previous studies suggested that HO-1 functions as a monomer. Using chemical cross-linking, co-immunoprecipitation, and fluorescence resonance energy transfer (FRET) experiments, here we showed that HO-1 forms dimers/oligomers in the ER. However, oligomerization was not observed with a truncated HO-1 lacking the C-terminal TMS (amino acids 266-285), which exhibited cytosolic and nuclear localization, indicating that the TMS is essential for the self-assembly of HO-1 in the ER. To identify the interface involved in the TMS-TMS interaction, residue Trp-270, predicted by molecular modeling as a potential interfacial residue of TMS alpha-helices, was mutated, and the effects on protein subcellular localization and activity assessed. The results showed that the W270A mutant was present exclusively in the ER and formed oligomers with similar activity to those of the wild type HO-1. Interestingly, the W270N mutant was localized not only in the ER, but also in the cytosol and nucleus, suggesting it is susceptible to proteolytic cleavage. Moreover, the microsomal HO activity of the W270N mutant was significantly lower than that of the wild type. The W270N mutation appears to interfere with the oligomeric state, as revealed by a lower FRET efficiency. Collectively, these data suggest that oligomerization, driven by TMS-TMS interactions, is crucial for the stabilization and function of HO-1 in the ER.