Biochemical, physiologic, and ultrastructural modifications which appear in the aortic intima and atrioventricular valves before monocyte diapedesis and foam cell formation were investigated in rabbits fed a cholesterol-rich diet. In the first 2 weeks of the diet, while plasma beta-VLDL cholesterol was increased up to 15-fold, the intima showed an enhanced uptake and deposition of dietary 3H-cholesterol, 125I-beta-VLDL, and the fluorescent beta-VLDL-1,1'-dioctadecyl-3,3,3',3'-tetramethylindocarbocyanine conjugate. beta-VLDL-gold complex perfused in situ was transcytosed across endothelium by plasmalemmal vesicles. Concomitantly, within the intima, a progressive accumulation of extracellular densely packed uni- or multilamellar vesicles took place. These commonly occurred in cell-free subendothelial spaces and were not associated with any sign of cytolysis. In freeze-fracture preparations, these vesicles appeared as smooth surfaces, suggesting the absence of translamellar proteins. Upon incubation with filipin, these extracellular liposomes (EL) displayed characteristic approximately 20 nm filipin-sterol complexes, revealing the presence of preparations unesterified cholesterol in the phospholipid lamellas. EL deposition was paralleled by proliferation of basal lamina-like material, microfibrils, and proteoglycans, and continued to increase during foam cell formation. For the entire period of our experiments, the endothelium was morphologically intact, and no platelet involvement was detected. The results show that an early prelesional ultrastructural change in lesion-prone aortic and valvular areas is the accumulation of extracellular phospholipid liposomes rich in unesterified cholesterol.