Proteins expressed in the endoplasmic reticulum (ER) are subjected to a tight quality control. Persistent association with ER-resident molecular chaperones prevents exit of misfolded or incompletely assembled polypeptides from the ER and forward transport along the secretory line. ER-associated degradation (ERAD) is in place to avoid ER constipation. Folding-incompetent products have to be identified to interrupt futile folding attempts and then targeted for unfolding and dislocation into the cytosol for proteasome-mediated destruction. These processes are better understood for N-glycosylated proteins that represent the majority of polypeptides expressed in the ER. EDEM, a mannosidase-like chaperone, regulates the extraction of misfolded glycoproteins from the calnexin cycle. Here we identify and characterize EDEM2, a novel, stress-regulated mannosidase-like protein that operates in the ER lumen. We show that transcriptional up-regulation of EDEM2 depends on the ER stress-activated transcription factor Xbp1, that EDEM2 up-regulation selectively accelerates ERAD of terminally misfolded glycoproteins by facilitating their extraction from the calnexin cycle, and that the previously characterized homolog EDEM is also a soluble protein of the ER lumen in HEK293 cells.