Proteins that are unfolded or misfolded in the endoplasmic reticulum (ER) must be targeted for refolding or degradation to maintain the homeostasis of the ER. Derlin-1 was reportedly implicated in the retro-translocation of misfolded proteins from the ER to the cytosol for degradation. In this report, we showed that Derlin-1 was down-regulated in the endothelial cells derived from human hepatic cavernous hemangioma (CHEC) compared with other tested cells. Electron microscopy analysis showed that ER was aberrantly enlarged in CHEC cells, but not in other tested cells. When overexpressed, Derlin-1 induced the dilated ER to return normal size. This ER dynamic was associated with the activation of unfolded protein response (UPR). In CHEC cells where Derlin-1 was down-regulated, increased expression of the immunoglobulin heavy chain-binding protein (Bip) and UPR-specific splicing of X-box DNA-binding protein 1 (XBP1) mRNA were detected, as compared with that in other tested cells, indicating that UPR was activated. After Derlin-1 overexpression, the extent of UPR activation diminished, as evidenced by decreased expression of Bip, reduced amount of the spliced form of XBP1 ($XBP1_S$), and elevated expression of the unspliced form of XBP1 ($XBP1_U$). Taken together, these findings provide another example of a single protein being able to affect ER dynamic in mammalian cells, and an insight into the possible molecular mechanism(s).