The HRD (HMG-CoA reductase degradation) pathway is a conserved route of endoplasmic reticulum-associated degradation (ERAD), by which misfolded ER proteins are ubiquitinated and degraded. ERAD substrates are ubiquitinated by the action of the Hrd1 RING-H2 E3 ligase. Hrd1 is always present in a stoichiometric complex with the ER membrane protein Hrd3, which is also required for HRD-dependent degradation. Despite its conserved presence, unequivocal study of Hrd3 function has been precluded by its central role in Hrd1 stability. Loss of Hrd3 causes unrestricted self-degradation of Hrd1, resulting in significant loss of the core ligase. Accordingly, the degree to which Hrd3 functions independently of Hrd1 stabilization has remained unresolved. By capitalizing on our studies of Usa1 in Hrd1 degradation, we have devised a new approach to evaluate Hrd3 functions in ERAD. We now show that Hrd3 has a direct and critical role in ERAD in addition to Hrd1 stabilization. This direct component of Hrd3 is phenotypically as important as Hrd1 in the native HRD complex. Hrd3 was required the E3 activity of Hrd1, rather than substrate or E2 recruitment to Hrd1. Although Hrd1 can function in some circumstances independent of Hrd3, these studies show an indispensable role for Hrd3 in living cells.