3-Hydroxy-3-methylglutaryl coenzyme A (HMG CoA) reductase is anchored to the endoplasmic reticulum (ER) membrane by a hydrophobic NH2-terminal domain that contains seven apparent membrane-spanning regions and a single N-linked carbohydrate chain. The catalytic domain, which includes the COOH-terminal two-thirds of the protein, extends into the cytoplasm. The enzyme is normally degraded with a rapid half-life (2 h), but when cells are depleted of cholesterol, its half-life is prolonged to 11 h. Addition of sterols accelerates degradation by fivefold. To explore the requirements for regulated degradation, we prepared expressible reductase cDNAs from which we either deleted two contiguous membrane-spanning regions (numbers 4 and 5) or abolished the single site for N-linked glycosylation. When expressed in hamster cells after transfection, both enzymes retained catalytic activity. The deletion-bearing enzyme continued to be degraded with a rapid half-life in the presence of sterols, but it no longer was stabilized when sterols were depleted. The glycosylation-minus enzyme was degraded at a normal rate and was stabilized normally by sterol deprivation. When cells were induced to overexpress the deletion-bearing enzyme, they did not incorporate it into neatly arranged crystalloid ER tubules, as occurred with the normal and carbohydrate-minus enzymes. Rather, the deletion-bearing enzyme was incorporated into hypertrophied but disordered sheets of ER membrane. We conclude that the carbohydrate component of HMG CoA reductase is not required for proper subcellular localization or regulated degradation. In contrast, the native structure of the transmembrane component is required to form a normal crystalloid ER and to allow the enzyme to undergo regulated degradation by sterols.