Previous work has implicated PPAR gamma in the regulation of CD36 expression and macrophage uptake of oxidized LDL (oxLDL). We provide evidence here that in addition to lipid uptake, PPAR gamma regulates a pathway of cholesterol efflux. PPAR gamma induces ABCA1 expression and cholesterol removal from macrophages through a transcriptional cascade mediated by the nuclear receptor LXR alpha. Ligand activation of PPAR gamma leads to primary induction of LXR alpha and to coupled induction of ABCA1. Transplantation of PPAR gamma null bone marrow into LDLR -/- mice results in a significant increase in atherosclerosis, consistent with the hypothesis that regulation of LXR alpha and ABCA1 expression is protective in vivo. Thus, we propose that PPAR gamma coordinates a complex physiologic response to oxLDL that involves particle uptake, processing, and cholesterol removal through ABCA1.