—Cholesterol efflux is a fundamental process that serves to mitigate cholesterol accumulation and macrophage foam cell formation. Recently, we reported that cholesterol efflux to high density lipoprotein subfraction 3 was reduced by interferon-γ (IFN-γ) and that this decrease was associated with an increase in acyl coenzyme A:cholesterol acyltransferase (ACAT) expression. In the present study, although treatment of murine peritoneal macrophages with IFN-γ resulted in a 2-fold decrease in HDL-mediated cholesterol efflux, efflux to lipid-free apolipoprotein A-I was reduced >4-fold and approached basal levels. This decrease was associated with a 3- to 4-fold reduction in ATP-binding-cassette transporter 1 (ABC1) mRNA content, the gene responsible for the defect in Tangier disease. Consistent with the reduction in cholesterol and phospholipid efflux in Tangier fibroblasts, downregulation of ABC1 expression by IFN-γ also resulted in reduced phosphatidylcholine and sphingomyelin efflux to apolipoprotein A-I. Whereas foam cells had a 3-fold increase in ABC1 mRNA, the decrease in ABC1 message levels by IFN-γ was observed in foam cells and control macrophages. This effect of IFN-γ was independent of general macrophage activation (inasmuch as similar changes were not detected with granulocyte-macrophage colony–stimulating factor) and was not observed with other ABC transporters (inasmuch as the expression of the transporter in antigen processing was upregulated 4-fold in these same cells). Therefore, by decreasing cholesterol efflux through pathways that include the upregulation of ACAT and the downregulation of ABC1, IFN-γ can shift the equilibrium between macrophages and foam cells and thus impact the progression of an atherosclerotic lesion.