In all eucaryotic cell types analyzed, proliferations of the endoplasmic reticulum (ER) can be induced by increasing the levels of certain integral ER proteins. One of the best characterized of these proteins is HMG-CoA reductase, which catalyzes the rate-limiting step in sterol biosynthesis. We have investigated the subcellular distributions of the two HMG-CoA reductase isozymes in Saccharomyces cerevisiae and the types of ER proliferations that arise in response to elevated levels of each isozyme. At endogenous expression levels, Hmg1p and Hmg2p were both primarily localized in the nuclear envelope. However, at increased levels, the isozymes displayed distinct subcellular localization patterns in which each isozyme was predominantly localized in a different region of the ER. Specifically, increased levels of Hmg1p were concentrated in the nuclear envelope, whereas increased levels of Hmg2p were concentrated in the peripheral ER. In addition, an Hmg2p chimeric protein containing a 77-amino acid lumenal segment from Hmg1p was localized in a pattern that resembled that of Hmg1p when expressed at increased levels. Reflecting their different subcellular distributions, elevated levels of Hmg1p and Hmg2p induced sets of ER membrane proliferations with distinct morphologies. The ER membrane protein, Sec61p, was localized in the membranes induced by both Hmg1p and Hmg2p green fluorescent protein (GFP) fusions. In contrast, the lumenal ER protein, Kar2p, was present in Hmg1p:GFP membranes, but only rarely in Hmg2p:GFP membranes. These results indicated that the membranes synthesized in response to Hmg1p and Hmg2p were derived from the ER, but that the membranes were not identical in protein composition. We determined that the different types of ER proliferations were not simply due to quantitative differences in protein amounts or to the different half-lives of the two isozymes. It is possible that the specific distributions of the two yeast HMG-CoA reductase isozymes and their corresponding membrane proliferations may reveal regions of the ER that are specialized for certain branches of the sterol biosynthetic pathway.