Rat liver cytosol contains proteins and smaller molecules that affect activities of the microsomal enzymes of cholesterol biosynthesis. One protein (mr = 12,000) has been purified by chromatography, gel filtration, and preparative isoelectric focusing. Properties of the protein on sodium dodecyl sulfate-, and anodic-, and cathodic-disc gel electrophoresis are reported in addition to gel filtration and electrofocusing that were used for purification. By comparison of these properties, amino acid compositions, ligand binding, and the abundance in various tissues the protein appears to be very similar to Z-protein that has been shown by others to be identical with hepatic fatty-acid binding protein. The same properties also appear to be very similar to sterol carrier protein. A cytosolic metabolite, heme, which stimulates 4-methyl sterol oxidase, is bound to the protein during purification. When endogeneous heme is removed, both protein and heme are required for maximal stimulation of microsomal 4-methyl sterol oxidase activity. Hemoglobin produces an equal extent of stimulation presumably by heme group exchange, but the nonexchangeable heme group of cytochrome c is ineffective. Thus, the cytosolic protein may promote uptake and retention of relatively more water-soluble substances into the hydrophobic environment of the membrane-bound enzymes of cholesterol biosynthesis. Z-protein exhibits affinity for an exceptionally wide variety of ligands (e.g. fatty acids, azodyes, organic anions, bile pigments, etc) that may either stimulate or inhibit the microsomal enzymes. Accordingly, with the suggestion that the cytosolic protein is Z-protein, the wide variety of potential interactions of both endogenous metabolites and exogenous xenobiotics may account, in part, for facile modulations of activities of the rate-limiting microsomal synthetic enzymes in various physiological and nutritional states.