HMG-CoA reductase (HMGR) undergoes regulated degradation as part of feedback control of the sterol pathway. In yeast, the stability of the HMGR isozyme Hmg2 is controlled by the 20-carbon isoprenoid geranylgeranyl pyrophosphate (GGPP). Increasing GGPP levels cause more efficient degradation by the HMG-CoA reductase degradation (HRD) pathway, allowing for feedback regulation of HMGR. The HRD pathway is critical for the endoplasmic reticulum (ER)-associated degradation (ERAD) of misfolded ER proteins. Here, we have explored GGPP's role in HRD-dependent Hmg2 degradation. We found that GGPP potently regulates Hmg2 levels in vivo and causes reversible Hmg2 misfolding at nanomolar concentrations in vitro These GGPP-mediated effects were absent in several stabilized or nonregulated Hmg2 mutants. Consistent with its high potency, GGPP's effects were highly specific such that other structurally related molecules were ineffective in altering Hmg2 structure. For instance, two closely related GGPP analogues, 2F-GGPP and GGSPP, were completely inactive at all concentrations tested. Furthermore, GGSPP antagonized GGPP's effects in vivo and in vitro Chemical chaperones reversed GGPP's effects on Hmg2 structure and degradation, suggesting that GGPP causes selective Hmg2 misfolding. These results indicate that GGPP functions in a manner similar to an allosteric ligand, causing Hmg2 misfolding through interaction with a reversible, specific binding site. Consistent with this, the Hmg2 protein formed multimers, typical of allosteric proteins. We propose that this "allosteric misfolding," or mallostery, observed here for Hmg2 may be a widely used tactic of biological regulation with potential for development of therapeutic small molecules that induce selective misfolding.