Endoplasmic reticulum (ER)-associated degradation (ERAD) is required for ubiquitin-mediated destruction of numerous proteins. ERAD occurs by processes on both sides of the ER membrane, including lumenal substrate scanning and cytosolic destruction by the proteasome. The ER resident membrane proteins Hrd1p and Hrd3p play central roles in ERAD. We show that these two proteins directly interact through the Hrd1p transmembrane domain, allowing Hrd1p stability by Hrd3p-dependent control of the Hrd1p RING-H2 domain activity. Rigorous reevaluation of Hrd1p topology demonstrated that the Hrd1p RING-H2 domain is located and functions in the cytosol. An engineered, completely lumenal, truncated version of Hrd3p functioned normally in both ERAD and Hrd1p stabilization, indicating that the lumenal domain of Hrd3p regulates the cytosolic Hrd1p RING-H2 domain by signaling through the Hrd1p transmembrane domain. Additionally, we identified a lumenal region of Hrd3p dispensable for regulation of Hrd1p stability, but absolutely required for normal ERAD. Our studies show that Hrd1p and Hrd3p form a stoichiometric complex with ERAD determinants in both the lumen and the cytosol. The HRD complex engages in lumen to cytosol communication required for regulation of Hrd1p stability and the coordination of ERAD events on both sides of the ER membrane.