We show that mice lacking the ATP-binding cassette transmembrane transporter ABCG1 show progressive and age-dependent severe pulmonary lipidosis that recapitulates the phenotypes of different respiratory syndromes in both humans and mice. The lungs of chow-fed Abcg1 ؊/؊ mice, >6-months old, exhibit extensive subpleural cellular accumulation, macrophage, and pneumocyte type 2 hypertrophy, massive lipid deposition in both macrophages and pneumocytes and increased levels of surfactant. No such abnormalities are observed at 3 months of age. However, gene expression profiling reveals significant changes in the levels of mRNAs encoding key genes involved in lipid metabolism in both 3-and 8-month-old Abcg1 ؊/؊ mice. These data suggest that the lungs of young Abcg1 ؊/؊ mice maintain normal lipid levels by repressing lipid biosynthetic pathways and that such compensation is inadequate as the mice mature. Studies with A-549 cells, a model for pneumocytes type 2, demonstrate that overexpression of ABCG1 specifically stimulates the efflux of cellular cholesterol by a process that is dependent upon phospholipid secretion. In addition, we demonstrate that Abcg1 ؊/؊ , but not wild-type macrophages, accumulate cholesterol ester droplets when incubated with surfactant. Together, these data provide a mechanism to explain the lipid accumulation in the lungs of Abcg1 ؊/؊ mice. In summary, our results demonstrate that ABCG1 plays essential roles in pulmonary lipid homeostasis.