Heme oxygenase-1 (HO-1) catalyzes the oxidative degradation of heme to biliverdin, carbon monoxide, and free iron in a reaction requiring the interaction of HO-1 with NADPH-cytochrome P450 reductase (CPR). HO-1 is bound to the endoplasmic reticulum by 23 C-terminal amino acids; however, a soluble HO-1 (sHO-1) lacking this membrane spanning region has been extensively studied. The goal of this project was to characterize the effect of the C-terminal hydrophobic domain on formation of the HO-1/CPR complex. Full-length HO-1 was shown to exhibit higher reaction rates than sHO-1, particularly at subsaturating CPR, indicating that the C-terminal region influences HO-1 binding to CPR. The increased activity of HO-1 was attributable to a time-dependent formation of a low K(m) HO-1/CPR complex that was not seen with sHO1. Gel filtration analysis confirmed the formation of multiple high molecular weight complexes in the presence and absence of the synthetic lipid dilauroylphosphatidylcholine (DLPC). However, the largest complex appeared following a 2 h incubation of HO-1 and CPR in DLPC, suggesting that the C-terminal region was required for the high-affinity HO-1/CPR complex formation and membrane incorporation. These data demonstrate that the C-terminal region of HO-1 influenced complex formation and ultimately its affinity for CPR.