Martha Stewart will also make her "Everyday" products available through the BlueLight.com site. The investment gives Martha Stewart Living a 5 percent stake in online venture.
The move follows a laundry list of similar deals from Internet-related companies. This week, Amazon.com took an 18 percent stake in Living.com and said it will create a home furnishings store on its Web site. On Monday, Launch Media, which streams music videos, signed an e-commerce pact with CheckOut.com.
Stewart, America's most famous home stylist, is chief executive of Martha Stewart Living, which operates magazines, radio and television shows, as well as Internet site Marthastewart.com. Martha Stewart Living held its initial public offering in October.
Kmart, which launched its Web store in December, is planning to spin off BlueLight.com sometime later this year.