3-hydroxy-3-methylglutaryl-CoA reductase (HMG-R), a key enzyme of sterol synthesis, is an integral membrane protein of the endoplasmic reticulum (ER). In both humans and yeast, HMG-R is degraded at or in the ER. The degradation of HMG-R is regulated as part of feedback control of the mevalonate pathway. Neither the mechanism of degradation nor the nature of the signals that couple the degradation of HMG-R to the mevalonate pathway is known. We have launched a genetic analysis of the degradation of HMG-R in Saccharomyces cerevisiae using a selection for mutants that are deficient in the degradation of Hmg2p, an HMG-R isozyme. The underlying genes are called HRD (pronounced "herd"), for HMG-CoA reductase degradation. So far we have discovered mutants in three genes: HRD1, HRD2, and HRD3. The sequence of the HRD2 gene is homologous to the p97 activator of the 26S proteasome. This p97 protein, also called TRAP-2, has been proposed to be a component of the mature 26S proteasome. The hrd2-1 mutant had numerous pleiotropic phenotypes expected for cells with a compromised proteasome, and these phenotypes were complemented by the human TRAP-2/p97 coding region. In contrast, HRD1 and HRD3 genes encoded previously unknown proteins predicted to be membrane bound. The Hrd3p protein was homologous to the Caenorhabditis elegans sel-1 protein, a negative regulator of at least two different membrane proteins, and contained an HRD3 motif shared with several other proteins. Hrd1p had no full-length homologues, but contained an H2 ring finger motif. These data suggested a model of ER protein degradation in which the Hrd1p and Hrd3p proteins conspire to deliver HMG-R to the 26S proteasome. Moreover, our results lend in vivo support to the proposed role of the p97/TRAP-2/Hrd2p protein as a functionally important component of the 26S proteasome. Because the HRD genes were required for the degradation of both regulated and unregulated substrates of ER degradation, the HRD genes are the agents of HMG-R degradation but not the regulators of that degradation.