The plasma cholesteryl ester-transfer protein (CETP, Mr 74,000) promotes exchange of both neutral lipids and phospholipids (phosphatidylcholine, PC) between lipoproteins. To investigate the mechanism of facilitated lipid transfer, CETP was incubated with unilamellar egg PC vesicles containing small amounts of cholesteryl ester (CE) or triglyceride, and then analyzed by gel filtration chromatography. There was rapid transfer of radiolabeled CE or triglyceride and PC from vesicles to CETP. The CETP with bound lipids was isolated and incubated with low density lipoproteins (LDL), resulting in transfer of the lipids to LDL. The CETP bound up to 0.9 mol of CE or 0.2 mol of triglyceride and 11 mol of PC/mol of CETP. para-Chloromercuriphenylsulfonate, an inhibitor of CE and triglyceride transfer, was found to decrease the binding of radiolabeled CE and triglyceride by CETP. Under various conditions the CETP eluted either as an apparent monomer with bound lipid (Mr 75,000-93,000), or in complexes with vesicles. The distribution of CETP between these two states was influenced by the presence of apoA-I or albumin, incubation time, vesicle/CETP ratio, and buffer pH and ionic strength. The results indicate that the CETP has binding sites for CE, triglyceride, and PC which readily equilibrate with lipoprotein lipids and suggest that CETP can act as a carrier of lipid between lipoproteins.