The role of albumin in mouse sperm capacitation was studied in relation to its activities as a lipid-solubilizing protein and a sterol acceptor. Two bovine serum albumins (BSA) which supported capacitation, Fraction V and fatty acid-free, both contained cholesterol and phospholipid but were without detectable levels of serum high-density lipoprotein (HDL). The lipid content of BSA could be reduced by trichloroacetic acid (TCA) precipitation; however, removal of all detectable lipids required precipitation with ethanolic acetone and diethyl ether extraction. In medium supplemented with Fraction V, fatty acid-free, or TCA-precipitated BSA, mouse sperm were capacitated as evidenced by their ability to fertilize eggs, concomitant with decreases in total cellular sterol and increases in phospholipid content. Delipidated BSA, fractionated on Sephadex G-100 in guanidine HCl also supported capacitation and mediated a 20% decrease in sperm sterol content, while cellular phospholipid levels remained unchanged. When BSA was modified by cholesterol augmentation, fertilization was inhibited in a cholesterol dose-dependent manner. These findings suggest that modulation of sperm lipid levels comprises an event of capacitation and that albumin mediates this process through its activity as a sterol acceptor.