We have cloned the Saccharomyces cerevisiae C-4 sterol methyl oxidase ERG25 gene. The sterol methyl oxidase performs the first of three enzymic steps required to remove the two C-4 methyl groups leading to cholesterol (animal), ergosterol (fungal), and stigmasterol (plant) biosynthesis. An ergosterol auxotroph, erg25, which fails to demethylate and concomitantly accumulates 4,4-dimethylzy-mosterol, was isolated after mutagenesis. A complementing clone consisting of a 1.35-kb Dra I fragment encoded a 309-amino acid polypeptide (calculated molecular mass, 36.48 kDa). The amino acid sequence shows a C-terminal endoplasmic reticulum retrieval signal KKXX and three histidine-rich clusters found in eukaryotic membrane desaturases and in a bacterial alkane hydroxylase and xylene monooxygenase. The sterol profile of an ERG25 disruptant was consistent with the erg25 allele obtained by mutagenesis.