Type III hyperlipoproteinemia (HLP) is a genetic disorder characterized by accumulation of remnant lipoproteins in the plasma and development of premature atherosclerosis. Although receptor binding-defective forms of apolipoprotein (apo) E are the common denominator in this disorder, a number of apparent paradoxes concerning its pathogenesis still exist. However, studies in transgenic animals are resolving the mechanisms underlying this disorder. PARADOX I: Defective apoE (commonly apoE2) is essential but not sufficient to cause overt type III HLP. In fact, most apoE2 homozygotes are hypolipidemic. Studies in apoE2 transgenic models have demonstrated the impact of other genes or hormones in converting the hypolipidemia to hyperlipidemia. PARADOX II: Among apoE2 homozygotes, men are more susceptible than women to type III HLP. Transgenic studies have shown that estrogen affects both LDL receptor expression and lipolytic processing, explaining the resistance of women to this disorder until after menopause. PARADOX III: ApoE deficiency is associated with hypercholesterolemia, whereas the type III HLP phenotype is characterized by both hypercholesterolemia and hypertriglyceridemia. The hypercholesterolemia is caused by impaired receptor-mediated clearance, whereas the hypertriglyceridemia is caused primarily by impaired lipolytic processing of remnants and increased VLDL production associated with increased levels of apoE. PARADOX IV: ApoE2 is associated with recessive inheritance of this disorder, whereas other defective apoE variants are associated with dominant inheritance. Determinants of the mode of inheritance are the differential binding of apoE variants to the LDL receptor versus the HSPG/LRP complex and the preference of certain apoE variants for specific lipoproteins. Thus, the pathogenesis of this sometimes mysterious disorder has been clarified.