Activation of acyl-CoA:cholesterol actyltransferase (ACAT) in macrophages by lipoproteins is a key event in atheroma foam cell formation. To help elucidate the mechanisms whereby lipoproteins stimulate ACAT, the early cellular events of lipoprotein-induced ACAT stimulation were studied in mouse peritoneal macrophages. As a function of increasing lipoprotein-cholesterol influx to the cell during the first few hours of incubation, ACAT activity was markedly stimulated by beta-very low density lipoprotein (beta-VLDL) and acetyl-low density lipoprotein (acetyl-LDL) only after lipoprotein-cholesterol influx reached a threshold level of approximately 25% above the basal cell cholesterol content. In contrast, LDL stimulated ACAT only minimally at this level of lipoprotein-cholesterol influx. In further experiments, the source of ACAT cholesterol substrate during the initial stimulation of ACAT was shown to be a mixture of cellular (approximately 75%) and lipoprotein-cholesterol (approximately 25%) in proportions that approximated the proportions of originally cellular and lipoprotein-cholesterol in the cell. Thus, lipoprotein-cholesterol rapidly mixed with most or all of cellular cholesterol before ACAT esterification. Additional studies showed that LDL caused significant efflux of cellular cholesterol, thus providing at least a partial explanation for the relatively weak ACAT stimulatory potential of LDL. To support this idea, LDL that was modified to decrease its ability to induce net cellular cholesterol efflux stimulated ACAT 2-fold greater than control LDL when matched for lysosomal LDL-cholesterol influx. Moreover, when the effective efflux potentials of beta-VLDL and acetyl-LDL were increased, ACAT stimulation was markedly decreased despite unchanged lipoprotein-cholesterol influx. Thus, macrophage ACAT is stimulated not directly by the influx of newly hydrolyzed lipoprotein-cholesterol but rather by net expansion of cellular cholesterol pools to a particular threshold level. This scheme has potentially important implications regarding the cellular and molecular mechanisms of foam cell formation.