The location inside rat liver parenchymal cells of 3-hydroxy-3-methylglutaryl-coenzyme A reductase (HMG-CoA reductase; EC 126.96.36.199), the key regulatory enzyme in cholesterol biosynthesis, has been examined by immunoelectron microscopy and by subcellular fractionation. Although HMG-CoA reductase is generally thought to be exclusively a microsomal enzyme, we find that a substantial portion of cellular HMG-CoA reductase is localized in peroxisomes. Immunoelectron microscopic labeling of ultrathin frozen sections of normal rat liver, using two monoclonal antibodies to purified HMG-CoA reductase, showed that the enzyme is present in the peroxisomes at a higher concentration than at any other site inside the hepatocytes. Subcellular fractionation studies using Percoll and metrizamide gradients demonstrated a close correspondence of peaks of HMG-CoA reductase activity and of catalase activity, again revealing the presence of the reductase enzyme in peroxisomes. HMG-CoA reductase is therefore localized in peroxisomes in addition to being in the microsomal fraction.