The mechanism of formation of functional high-density lipoprotein (HDL) from secreted lipid-free apolipoprotein A1 (apo A1) was determined using human liver-derived (HepG2) cells, human intestine-derived (CaCO2) cells, and CHO cells stably expressing full-length human apo A1 (CHO-A1 cells). In each cell line, a significant proportion of secreted apo A1 had a Stokes radius of 2.6 nm and was inactive in binding phospholipids (PL) or free cholesterol (FC). Extracellularly, in a reaction dependent on membrane transporter ABCA1, prealpha-migrating 2.6 nm apo A1 was converted to a prebeta-migrating product that was able to bind PL. Both forms were reactive with mAb55201, a monoclonal antibody specific for native plasma lipid-poor (prebeta1) HDL [Nakamura, Y., et al. (2004) Biochemistry 43, 14311-14318]. The physical properties of precursor and product apo A1 suggested that both are monomers, with Stokes radii of 2.6 and 3.6 nm, respectively, consistent with the absence of intermolecular cross-linking of apo A1 in lipid-poor HDL, reported previously. Product but not precursor apo A1 promoted reverse cholesterol transport (RCT) from human aortic smooth muscle cells. These studies suggest an important contribution of secreted lipid-free apo A1 to HDL formation.