Mutations in the gene encoding ATP-binding cassette transporter 1 (ABC1) have been reported in Tangier disease 1, 2, 3 (TD), an autosomal recessive disorder that is characterized by almost complete absence of plasma high-density lipoprotein (HDL), deposition of cholesteryl esters in the reticulo-endothelial system 4 (RES) and aberrant cellular lipid trafficking 5, 6, 7, 8, 9, 10, 11, 12. We demonstrate here that mice with a targeted inactivation of Abc1 display morphologic abnormalities and perturbations in their lipoprotein metabolism concordant with TD. ABC1 is expressed on the plasma membrane and the Golgi complex, mediates apo-AI associated export of cholesterol and phospholipids from the cell, and is regulated by cholesterol flux. Structural and functional abnormalities in caveolar processing and the trans-Golgi secretory pathway of cells lacking functional ABC1 indicate that lipid export processes involving vesicular budding between the Golgi and the plasma membrane are severely disturbed.