To identify the residues in the carboxyl-terminal region 260-299 of human apolipoprotein E (apoE) that contribute to hypertriglyceridemia, two sets of conserved, hydrophobic amino acids between residues 261 and 283 were mutated to alanines, and recombinant adenoviruses expressing these apoE mutants were generated. Adenovirus-mediated gene transfer of apoE4-mut1 (apoE4 (L261A, W264A, F265A, L268A, V269A)) in apoE-deficient mice (apoE(-/-)) corrected plasma cholesterol levels and did not cause hypertriglyceridemia. In contrast, gene transfer of apoE4-mut2 (apoE4 (W276A, L279A, V280A, V283A)) did not correct hypercholesterolemia and induced mild hypertriglyceridemia. ApoE-induced hyperlipidemia was corrected by co-infection with a recombinant adenovirus expressing human lipoprotein lipase. Both apoE4 mutants caused only a small increase in hepatic very low density lipoprotein-triglyceride secretion. Density gradient ultracentrifugation analysis of plasma and electron microscopy showed that wild-type apoE4 and apoE4-mut2 displaced apoA-I from the high density lipoprotein (HDL) region and promoted the formation of discoidal HDL, whereas the apoE4-mut1 did not displace apoA-I from HDL and promoted the formation of spherical HDL. The findings indicate that residues Leu-261, Trp-264, Phe-265, Leu-268, and Val-269 of apoE are responsible for hypertriglyceridemia and also interfere with the formation of HDL. Substitutions of these residues by alanine provide a recombinant apoE form with improved biological functions.