Initiation of atherosclerosis is characterized by accumulation of aggregates of small lipid droplets and vesicles in the extracellular matrix of the arterial intima. The droplets and vesicles have features that suggest that they are formed from modified plasma-derived low density lipoprotein (LDL) particles. A variety of hydrolytic enzymes and prooxidative agents that could lead to extracellular assembly of LDL-derived droplets and vesicles are present in the arterial intima. In fact, in vitro studies have demonstrated that extensive oxidation of LDL and treatment of LDL with either proteolytic or lipolytic enzymes will induce LDL aggregation and fusion and treatment of LDL with cholesterol esterase will cause formation of vesicles. Fusion of LDL particles proceeds faster in vitro when they are bound to components of the extracellular matrix derived from the arterial intima, such as proteoglycans, and, depending on the type of modification, the strength of binding of modified LDL to the matrix components may either increase or decrease. In the present article, we discuss molecular mechanisms that provide clues as to how aggregated lipid droplets and vesicles may be derived from modified LDL particles. We also describe how these modified forms of LDL, by means of their trapping to the extracellular matrix, may lead to extracellular lipid accumulation in the arterial intima.