Scavenger receptor BI, SR-BI, is a physiologically relevant receptor for high density lipoprotein (HDL) that mediates the uptake of cholesteryl esters and delivers them to a metabolically active membrane pool where they are subsequently hydrolyzed. A previously characterized SR-BI mutant, A-VI, with an epitope tag inserted into the extracellular domain near the C-terminal transmembrane segment, revealed a separation-of-function between SR-BI-mediated HDL cholesteryl ester uptake and cholesterol efflux to HDL, on one hand, and cholesterol release to small unilamellar phospholipid vesicle acceptors and an increased cholesterol oxidase-sensitive pool of membrane free cholesterol on the other. To further elucidate amino acid residues responsible for this separation-of-function phenotype, we engineered alanine substitutions and point mutations in and around the site of epitope tag insertion, and tested these for various cholesterol transport functions. We found that changing amino acid 420 from glycine to histidine had a profound effect on SR-BI function. Despite the ability to mediate selective HDL cholesteryl ester uptake, the G420H receptor had a greatly reduced ability to: 1) enlarge the cholesterol oxidase-sensitive pool of membrane free cholesterol, 2) mediate cholesterol efflux to HDL, even at low concentrations of HDL acceptor where binding-dependent cholesterol efflux predominates, and 3) accumulate cholesterol mass within the cell. Most importantly, the G420H mutant was unable to deliver the HDL cholesteryl ester to a metabolically active membrane compartment for efficient hydrolysis. These observations have important implications regarding SR-BI function as related to its structure near the C-terminal transmembrane domain.