Sterol synthesis by the mevalonate pathway is modulated, in part, through feedback-regulated degradation of 3-hydroxy-3-methylglutaryl-CoA reductase (HMGR). In mammals, both a non-sterol isoprenoid signal derived from farnesyl diphosphate (FPP) and a sterol-derived signal appear to act together to positively regulate the rate of HMGR degradation. Although the nature and number of sterol-derived signals are not clear, there is growing evidence that oxysterols can serve in this capacity. In yeast, a similar non-sterol isoprenoid signal generated from FPP acts to positively regulate HMGR degradation, but the existence of any sterol-derived signal has thus far not been revealed. We now demonstrate, through the use of genetic and pharmacological manipulation of oxidosqualene-lanosterol cyclase, that an oxysterol-derived signal positively regulated HMGR degradation in yeast. The oxysterol-derived signal acted by specifically modulating HMGR stability, not endoplasmic reticulum-associated degradation in general. Direct biochemical labeling of mevalonate pathway products confirmed that oxysterols were produced endogenously in yeast and that their levels varied appropriately in response to genetic or pharmacological manipulations that altered HMGR stability. Genetic manipulation of oxidosqualene-lanosterol cyclase did result in the buildup of detectable levels of 24,25-oxidolanosterol by gas chromatography, gas chromatography-mass spectroscopy, and NMR analyses, whereas no detectable amounts were observed in wild-type cells or cells with squalene epoxidase down-regulated. In contrast to mammalian cells, the yeast oxysterol-derived signal was not required for HMGR degradation in yeast. Rather, the function of this second signal was to enhance the ability of the FPP-derived signal to promote HMGR degradation. Thus, although differences do exist, both yeast and mammalian cells employ a similar strategy of multi-input regulation of HMGR degradation.