The key regulatory enzyme of cholesterol, dolichol, and isopentenyl adenosine biosynthesis, 3-hydroxy-3-methylglutaryl-coenzyme A reductase (HMG-CoA reductase) is a 97-kilodalton transmembrane glycoprotein which was believed until recently to reside exclusively in the endoplasmic reticulum of mammalian cells. However, several recent publications have shown that the enzyme in liver cells is present not only in the endoplasmic reticulum but also within peroxisomes. In an effort to clarify the role of peroxisomal HMG-CoA reductase, highly purified (95%) rat liver peroxisomes from cholestyramine-treated rats were incubated with RS-[2-14C]mevalonic acid plus cytosolic proteins and then tested for the presence of newly synthesized cholesterol. For comparison, highly purified microsomes from the same liver preparation were incubated at several protein concentrations under the same conditions. A three-step procedure was employed to resolve the newly synthesized cholesterol from the complex mixture of sterol intermediates in cholesterol biosynthesis. After termination of the reaction and addition of a [3H]cholesterol standard, the incubation products were extracted and separated by thin layer chromatography into a number of fractions. The fraction containing C-27 sterols was further resolved by reverse-phase high pressure liquid chromatography. After acetylation, the products were then separated by silicic acid high pressure liquid chromatography. Confirmation of the identity of newly synthesized cholesterol was obtained by recrystallization with added non-radioactive cholestenyl acetate standard. The results indicate that highly purified rat liver peroxisomes are able to convert mevalonic acid to cholesterol in the presence of cytosolic fraction in vitro. An abstract of these results has been published (Krisans, S. K., Thompson, S. L., Burrows, R., and Laub, R. J. (1986) J. Cell Biol. 103, 525 (abstr.).