Peroxisome proliferator-activated receptor ␥1 (PPAR␥1) and liver X receptor ␣ (LXR␣) play pivotal roles in macrophage cholesterol homeostasis and inflammation, key biological processes in atherogenesis. Herein we identify adipocyte enhancer-binding protein 1 (AEBP1) as a transcriptional repressor that impedes macrophage cholesterol efflux, promoting foam cell formation, via PPAR␥1 and LXR␣ down-regulation. Contrary to AEBP1 deficiency, AEBP1 overexpression in macrophages is accompanied by decreased expression of PPAR␥1, LXR␣, and their target genes ATP-binding cassette A1, ATP-binding cassette G1, apolipoprotein E, and CD36, with concomitant elevation in IL-6, TNF-␣, monocyte chemoattractant protein 1, and inducible NO synthase levels. AEBP1, but not the C-terminally truncated DNA-binding domain mutant (AEBP1 ⌬Sty ), represses PPAR␥1 and LXR␣ in vitro. Expectedly, AEBP1-overexpressing transgenic (AEBP1 TG ) macrophages accumulate considerable amounts of lipids compared with AEBP1 nontransgenic macrophages, making them precursors for foam cells. Indeed, AEBP1-overexpressing transgenic macrophages exhibit diminished cholesterol efflux compared with AEBP1 nontransgenic macrophages, whereas AEBP1-knockout (AEBP1 ؊/؊ ) macrophages exhibit enhanced cholesterol efflux compared with wild-type (AEBP1 ؉/؉ ) macrophages. Our in vitro and ex vivo experimental data strongly suggest that AEBP1 plays critical regulatory roles in macrophage cholesterol homeostasis, foam cell formation, and proinflammation. Thereby, we speculate that AEBP1 may be critically implicated in the development of atherosclerosis, and it may serve as a molecular target toward developing antiinflammatory, antiatherogenic therapeutic approaches.atherogenesis ͉ cholesterol efflux ͉ liver X receptor ␣ ͉ peroxisome proliferator-activated receptor ␥