Mutations of the ABC1 transporter have been identified as the defect in Tangier disease, characterized by low HDL and cholesterol ester accumulation in macrophages. A full-length mouse ABC1 cDNA was used to investigate the mechanisms of lipid efflux to apoA-I or HDL in transfected 293 cells. ABC1 expression markedly increased cellular cholesterol and phospholipid efflux to apoA-I but had only minor effects on lipid efflux to HDL. The increased lipid efflux appears to involve a direct interaction between apoA-I and ABC1, because ABC1 expression substantially increased apoA-I binding at the cell surface, and chemical cross-linking and immunoprecipitation analysis showed that apoA-I binds directly to ABC1. In contrast to scavenger receptor BI (SR-BI), another cell surface molecule capable of facilitating cholesterol efflux, ABC1 preferentially bound lipid-free apoA-I but not HDL. Immunofluorescence confocal microscopy showed that ABC1 is primarily localized on the cell surface. In the absence of apoA-I, cells overexpressing ABC1 displayed a distinctive morphology, characterized by plasma membrane protrusions and resembling echinocytes that form when there are excess lipids in the outer membrane hemileaflet. The studies provide evidence for a direct interaction between ABC1 and apoA-I, but not HDL, indicating that free apoA-I is the metabolic substrate for ABC1. Plasma membrane ABC1 may act as a phospholipid/cholesterol flippase, providing lipid to bound apoA-I, or to the outer membrane hemileaflet.