In order to gain better understanding of the function of hepatic lipase (HL) in vivo, we have generated mice that lack HL using gene targeting in embryonic stem cells. No mRNA for HL was detected in the liver of homozygous mutants, and no HL activity was detected in their plasma. Total cholesterol levels in plasma of mutant mice were increased by about 30% compared with wild type animals. Plasma phospholipids and high density lipoprotein (HDL) cholesterol were also increased, but plasma levels of triglycerides were not altered. Analysis of density fractions of plasma lipoproteins revealed that HDL1 (d = 1.02-1.04) was increased in homozygous mutants fed regular chow. In response to a diet containing high fat and high cholesterol, HDL cholesterol was doubled in the mutants, but was slightly decreased in the wild type mice. These results clearly demonstrate the importance of HL in HDL remodeling and metabolism in vivo. Various earlier studies suggested a role of HL in metabolism of triglyceride-rich particles, but the mutant mice appear to have no impairment in clearing them; the mutants clear exogenously introduced chylomicrons from plasma at a normal rate, and they tolerate acute fat loading as well as normal animals unless the loading is extreme. These differences may reflect species differences. However, it is also possible that the consequence of absence of HL as in our mutants is different from the consequence when nonfunctional HL protein is present as in the human HL-deficient patients and in rats treated with HL antibodies. We hypothesize that absence of HL in mutant mice allows other lipases to bind to the sites in the liver normally occupied by HL and facilitate the clearance of triglyceride-rich particles in these mice.