Incubation of leukocytes in buffer alone devoid of lipoproteins does not lead to the induction of 3-hydroxy-3-methylglutaryl-coenzyme A (HMG-CoA) reductase, but incubation of these cells in lipid-depleted serum, abetaliprproteinemic serum, or lipoprotein-deficient serum (d greater than 1.21) leads to sterol loss from the cells and the activation of sterol synthesis from acetate. The latter was shown previously to be proportional to the HMG-CoA reductase levels in the cells (Fogelman, A. M., Edmond, J., Seager, J., and Popják, G. (1975)J. Biol. Chem. 250, 2045-2055). Sterol loss occurs from normal and heterozygous familial hypercholesterolemic leukocytes within 15 min in lipid-depleted serum. Since induction of HMG-CoA reductase activity is not detectable until after the leukocytes have been incubated in the lipid-depleted serum for at least 3 h (Fogelman et al., see above), sterol loss clearly precedes the induction of the enzyme. In six out of six experiments, the nonisotopic sterol content of leukocytes incubated in lipid-depleted serum was equal to or lower than that of the same leukocytes incubated in full serum. This occurred at a time when the leukocytes in the lipid-depleted serum were incorporating 4 to 5 times more [14C]acetate into sterols than the same leukocytes in full serum. This strongly suggests that the induction of the reductase was a compensatory mechanism for sterol loss. Incubation of leukocytes in buffer, or buffer plus lecithin dispersions, or buffer plus albumin did not lead to sterol loss or induction of the reductase, but incubation in buffer and albumin together with lecithin dispersions caused sterol loss into the medium and the activation of sterol synthesis from acetate. It is concluded that a phospholipid-protein-cell interaction, which produces sterol loss, is necessary to induce the reductase in leukocytes. A close correlation between sterol loss and total sterol synthesis (a function of HMG-CoA reductase activity) was demonstrated in normal and heterozygous leukocytes incubated in a variety of incubation media (r = 0.95; p less than 0.005). Heterozygous leukocytes taken fresh from the blood contained no more cholesterol than the leukocytes of their age and sex-matched controls, despite the marked difference in their serum cholesterol concentrations. It is proposed that the abnormality in familial hypercholesterolemia can be accounted for by an abnormal efflux of cholesterol from heterozygous cells.