Isoform-specific effects of apolipoprotein E (apoE) on neurite outgrowth and the cytoskeleton are associated with higher intracellular levels of apoE3 than apoE4 in cultured neurons. The current studies, designed to determine the mechanism for the differential intracellular accumulation or retention of apoE, demonstrate that apoE3- and apoE4-containing beta-very low density lipoproteins (beta-VLDL) possess similar cell binding and internalization and delivery of cholesterol to the cells. However, as assessed by immunocytochemistry, analysis of extracted cellular proteins, or quantitation of 125I-apoE-enriched beta-VLDL, there was a 2-3-fold greater accumulation of apoE3 than apoE4 in Neuro-2a cells, fibroblasts, and hepatocytes (HepG2) after 1-2 h, and this differential was maintained for up to 48 h. ApoE2 also accumulated in Neuro-2a cells to a greater extent than apoE4. The differential effect was mediated by the apoE-enriched beta-VLDL and not by free apoE. Neither the low density lipoprotein receptor nor the low density lipoprotein receptor-related protein was responsible for the differential accumulation of apoE3 and apoE4, since cells deficient in either or both of these receptors also displayed the differential accumulation. The effect appears to be mediated primarily by cell surface heparan sulfate proteoglycans (HSPG). The retention of both apoE3 and apoE4 was markedly reduced, and the differential accumulation of apoE3 and apoE4 was eliminated both in mutant Chinese hamster ovary cells that did not express HSPG and in HSPG-expressing cells treated with heparinase. The data suggest that cell surface HSPG directly mediate the uptake of apoE-containing lipoproteins, that the differential accumulation/retention of apoE by cells is mediated via HSPG, and that there is a differential intracellular handling of the specific apoE isoforms.