We have recently demonstrated that mevalonate kinase and farnesyl diphosphate (FPP) synthase are localized predominantly in peroxisomes. This observation raises the question regarding the subcellular localization of the enzymes that catalyze the individual steps in the pathway between mevalonate kinase and FPP synthase (phosphomevalonate kinase, mevalonate diphosphate decarboxylase, and isopentenyl diphosphate isomerase). These enzyme are found in the 100,000 x g supernatant fraction of cells or tissues and have been considered to be cytoplasmic proteins. In the current studies, we show that the activities of mevalonate kinase, phosphomevalonate kinase, and mevalonate diphosphate decarboxylase are equal in extracts prepared from intact cells and selectively permeabilized cells, which lack cytosolic enzymes. We also demonstrate structure-linked latency of phosphomevalonate kinase and mevalonate diphosphate decarboxylase that is consistent with a peroxisomal localization of these enzymes. Finally, we show that cholesterol biosynthesis from mevalonate can occur in selectively permeabilized cells lacking cytosolic components. These results suggest that the peroxisome is the major site of the synthesis of FPP from mevalonate, since all of the cholestrogenic enzymes involved in this conversion are localized in the peroxisome.