Our group and others have recently demonstrated that peroxisomes contain a number of enzymes involved in cholesterol biosynthesis that previously were considered to be cytosolic or located in the endoplasmic reticulum (ER). Peroxisomes have been shown to contain HMG-CoA reductase, mevalonate kinase, phosphomevalonate kinase, phosphomevalonate decarboxylase, isopentenyl diphosphate isomerase, and FPP synthase. Four of the five enzymes required for the conversion of mevalonate to FPP contain a conserved putative PTS1 or PTS2, supporting the concept of targeted transport into peroxisomes. To date, no information is available regarding the function of the peroxisomal HMG-CoA reductase in cholesterol/isoprenoid metabolism, and the structure of the peroxisomal HMG-CoA reductase has yet to be determined. We have identified a mammalian cell line that expresses only one HMG-CoA reductase protein, and which is localized exclusively to peroxisomes, to facilitate our studies on the function, regulation, and structure of the peroxisomal HMG-CoA reductase. This cell line was obtained by growing UT2 cells (which lack the ER HMG-CoA reductase) in the absence of mevalonate. The surviving cells exhibited a marked increase in a 90-kD HMG-CoA reductase that was localized exclusively to peroxisomes. The wild-type CHO cells contain two HMG-CoA reductase proteins, the well-characterized 97-kD protein localized in the ER, and a 90-kD protein localized in peroxisomes. We have also identified the mutations in the UT2 cells responsible for the lack of the 97-kD protein. In addition, peroxisomal-deficient Pex2 CHO cell mutants display reduced HMG-CoA reductase levels and have reduced rates of sterol and nonsterol biosynthesis. These data further support the proposal that peroxisomes play an essential role in isoprenoid biosynthesis.