The activity of 3-hydroxy-3-methylglutaryl-CoA (HMGCoA) reductase of rat liver microsomes was inhibited by the addition of FeSO4 and the cytosolic protein, fermodulin. Modulation of the activity was obtained only in the combined presence of Fe2+ and fermodulin. Using ammonium sulfate fractionation, heat treatment, and chromatography on CM-Sephadex and then on an Fe2+-Blue Sepharose affinity matrix, fermodulin was purified to homogeneity. The molecular weight of the purified protein, as determined by filtration through a Sephacryl S-200 column, was 58,000. On sodium dodecyl sulfate-polyacrylamide gel electrophoresis the protein resolved into two subunits of Mr 43,000 and 28,000. Fermodulin showed ultraviolet absorption and fluorescence spectra typical of tryptophan-containing proteins, and addition of FeSO4 quenched the fluorescence. Using the Millipore filter assay the binding of 1.6 mol 55FeCl2/mol fermodulin was observed in the presence of Tris-HCl buffer. The inhibitory effect of fermodulin at nonsaturating concentrations was potentiated by bicarbonate, ATP.Mg, and ADP.Mg.