Protein localization within cells regulates accessibility for interactions with co-factors and substrates. The endoplasmic reticulum (ER) BiP co-factor ERdj4 is up-regulated by ER stress and has been implicated in ER-associated degradation (ERAD) of multiple unfolded secretory proteins. Several other ERdj family members tend to interact selectively with nascent proteins, presumably because those ERdj proteins associate with the Sec61 translocon that facilitates entry of nascent proteins into the ER. How ERdj4 selects and targets terminally misfolded proteins for destruction remains poorly understood. In this study, we determined properties of ERdj4 that might aid in this function. ERdj4 was reported to retain its signal sequence and to be resistant to mild detergent extraction, suggesting that it was an integral membrane protein. However, live cell photobleaching analyses of GFP-tagged ERdj4 revealed that the protein exhibits diffusion coefficients uncommonly high for an ER integral membrane protein and more similar to the mobility of a soluble luminal protein. Biochemical characterization established that the ERdj4 signal sequence is cleaved to yield a soluble protein. Importantly, we found that both endogenous and overexpressed ERdj4 associate with the integral membrane protein, Derlin-1. Our findings now directly link ERdj4 to the ERAD machinery and suggest a model in which ERjd4 could help recruit clients from throughout the ER to ERAD sites.