Misfolded proteins of the endoplasmic reticulum (ER) are retrotranslocated to the cytosol and degraded by the proteasome via a process termed ER-associated degradation (ERAD). The precise mechanism of retrotranslocation is unclear. Here, we use several lumenal ERAD substrates targeted for degradation by the ubiquitin ligase HRD1 including SHH (sonic hedgehog) and NHK (null Hong Kong α1-antitrypsin) to study the geometry, organization, and regulation of the HRD1-containing ERAD machinery. We report a new HRD1-associated membrane protein named HERP2, which is homologous to the previously identified HRD1 partner HERP1. Despite sequence homology, HERP2 is constitutively expressed in cells, whereas HERP1 is highly induced by ER stress. We find that these proteins are required for efficient degradation of both glycosylated and nonglycosylated SHH proteins as well as NHK. In cells depleted of HERPs, SHH proteins are largely trapped inside the ER with a fraction of the stabilized SHH protein bound to the HRD1-SEL1L ligase complex. Ubiquitination of SHH is significantly attenuated in the absence of HERPs, suggesting a defect in retrotranslocation. Both HERP proteins interact with HRD1 through a region located in the cytosol. However, unlike its homolog in Saccharomyces cerevisiae, HERPs do not regulate HRD1 stability or oligomerization status. Instead, they help recruit DERL2 to the HRD1-SEL1L complex. Additionally, the UBL domain of HERP1 also seems to have a function independent of DERL2 recruitment in ERAD. Our studies have revealed a critical scaffolding function for mammalian HERP proteins that is required for forming an active retrotranslocation complex containing HRD1, SEL1L, and DERL2.