Patients with familial dysbetalipoproteinemia (F. Dys.), also called familial type 3 hyperlipoproteinemia, are homozygous for a mutant allele, Ed, that specifies an abnormal form of apoprotein (apo) E, a prominent constituent of remnant lipoproteins derived from very low density lipoproteins (VLDL) and chylomicrons. Apo E is thought to mediate the removal of remnant lipoproteins from the plasma by virtue of its ability to bind to hepatic lipoprotein receptors. In F. Dys. patients, remnant-like lipoproteins accumulate, apparently because of delayed clearance by the liver. In the current studies, we show that the abnormal protein specified by the Ed allele (apo E-D) from some, but not all, patients with F. Dys. has a markedly deficient ability to bind to low density lipoprotein (LDL) receptors. Apo E was isolated from eight control subjects and nine patients with F. Dys. and incorporated into phospholipid complexes. The complexes were tested for their ability to compete with human 125I-LDL or rabbit 125I-beta-VLDL fo binding to LDL receptors in four assay systems: cultured human fibroblasts, solubilized receptors from bovine adrenal cortex, liver membranes from rats treated with 17 alpha-ethinyl estradiol, and liver membranes from normal rabbits. The apo E-D from six of the nine patients with F. Dys. showed binding affinities for LDL receptors that were reduced by greater than 98% in all receptor assays (group 1 patients). All of these group 1 patients were unequivocally of phenotype apo E-D/D by the criterion of isoelectric focussing. The apo E from the three other F. Dys. patients showed a near normal binding ability in all four of the receptor assays (group 2 patients). One of these group 2 patients appeared to have the apo E-D/D phenotype by isoelectric focussing. In the other two patients in group 2, apo E-D was the predominant protein (phenotype, apo E-D/D), but traces of protein in the region corresponding to normal apo E (apo E-N) were also present. The difference between group 1 and group 2 patients was also apparent when the apo E was iodinated and tested directly for binding to liver membranes from rats treated with 17 alpha-ethinyl estradiol. The 125I-labeled apo E from a group 2 patient, but not a group 1 patient, showed enhanced uptake when perfused through the liver of an estradiol-treated rate, indicating that the receptor binding ability of apo E correlated with uptake in the intact liver. The current studies allow the subdivision of patients with F. Dys. into two groups. In group 1, the elevated plasma level of remnants appears to be due to a diminished receptor binding activity of the abnormal protein specified by the Ed allele; in group 2 patients, the cause of the elevated plasma level of remnants remains to be explained.