Apolipoprotein (apo) E, a constituent of several lipoproteins, is a ligand for the low density lipoprotein receptor, and this interaction is important for maintaining cholesterol and triglyceride homeostasis. We have used a gene replacement strategy to generate mice that express the human apoE3 isoform in place of the mouse protein. The levels of apoE mRNA in various tissues are virtually the same in the human apoE3 homozygous (3/3) mice and their littermates having the wild type mouse allele (+/+). Total cholesterol and triglyceride levels in fasted plasma from the 3/3 mice were not different from those in the +/+ mice, when maintained on a normal (low fat) chow diet. We found, however, notable differences in the distribution of plasma lipoproteins and apolipoprotein E between the two groups: beta-migrating lipoproteins and plasma apoB100 levels are decreased in the 3/3 mice, and the apoE distribution is shifted from high density lipoproteins to larger lipoprotein particles. In addition, the fractional catabolic rate of exogenously administered remnant particles without apoE was 6-fold slower in the 3/3 mice compared with the +/+ mice. When the 3/3 and +/+ animals were fed a high fat/high cholesterol diet, the 3/3 animals responded with a dramatic increase (5-fold) in total cholesterol compared with the +/+ mice (1.5-fold), and after 12 weeks on this same diet the 3/3 animals developed significantly (at least 13-fold) larger atherosclerotic plaques in the aortic sinus area than the +/+ animals. Thus the structural differences between human APOE3 and mouse ApoE proteins are sufficient to cause an increased susceptibility to dietary-induced hypercholesterolemia and atherosclerosis in the 3/3 mice.