The endoplasmic reticulum (ER) of the yeast Saccharomyces cerevisiae contains of proteolytic system able to selectively degrade misfolded lumenal secretory proteins. For examination of the components involved in this degradation process, mutants were isolated. They could be divided into four complementation groups. The mutations led to stabilization of two different substrates for this process. The mutant classes were called 'der' for 'degradation in the ER'. DER1 was cloned by complementation of the der1-2 mutation. The DER1 gene codes for a novel, hydrophobic protein, that is localized to the ER. Deletion of DER1 abolished degradation of the substrate proteins. The function of the Der1 protein seems to be specifically required for the degradation process associated with the ER. The depletion of Der1 from cells causes neither detectable growth phenotypes nor a general accumulation of unfolded proteins in the ER. In DER1-deleted cells, a substrate protein for ER degradation is retained in the ER by the same mechanism which also retains lumenal ER residents. This suggests that DER1 acts in a process that directly removes protein from the folding environment of the ER.