Previous studies showed that transgenic mice overexpressing either apolipoprotein AI (apoAI) or apolipoprotein AII (apoAII), the major proteins of HDL, exhibited elevated levels of HDL cholesterol, but, whereas the apoAI-transgenic mice were protected against atherosclerosis, the apoAII-transgenic mice had increased lesion development. We now examine the basis for this striking functional heterogeneity. HDL from apoAI transgenics exhibited an enhanced ability to promote cholesterol efflux from macrophages, but HDL from apoAII transgenics and nontransgenics were not discernibly different in efflux studies. In contrast with HDL from nontransgenics and apoAI transgenics, HDL from the apoAII transgenics were unable to protect against LDL oxidation in a coculture model of the artery wall. Furthermore, HDL taken from apoAII-transgenic mice, but not HDL taken from either the apoAI transgenics or nontransgenic littermate controls, by itself stimulated lipid hydroperoxide formation in artery wall cells and induced monocyte transmigration, indicating that the apoAII-transgenic HDL were in fact proinflammatory. This loss in the ability of the apoAII-transgenic HDL to function as an antioxidant/antiinflammatory agent was associated with a decreased content of paraoxonase, an enzyme that protects against LDL oxidation. Reconstitution of the apoAII transgenic HDL with purified paraoxonase restored both paraoxonase activity and the ability to protect against LDL oxidation. We conclude that overexpression of apoAII converts HDL from an anti- to a proinflammatory particle and that paraoxonase plays a role in this transformation.