Peripheral lymph high density lipoproteins (HDL) of the cholesterol-fed dog differ in a number of characteristics from plasma HDL of the same animal. Their high content of free cholesterol, phospholipid, apoprotein E, and apoprotein A-IV, their greater heterogeneity in size, and the presence of many discoidal particles suggest that a portion of lymph HDL is assembled within the interstitial fluid. The present experiments demonstrate that the endogenous lecithin:cholesterol acyltransferase (LCAT) activity of whole peripheral lymph of the cholesterol-fed dog is far less (less than 1%) than that found in the plasma of the same animal (0.3 nmol/hr per ml versus 40.6 nmol/hr per ml). Addition of partially purified LCAT to whole lymph induced many changes in the chemical composition of peripheral lymph lipoproteins. After incubation with LCAT, the free cholesterol and phospholipid contents of lymph HDL decreased, from 17% to 12% and from 46% to 33%, respectively, whereas cholesteryl ester content increased from 7% to 13%. These changes were accompanied by a mass transfer of apoprotein E and cholesterol to the p less than 1.05 g/ml fraction, the complete disappearance of the discoidal particles, and a decrease in size heterogeneity of lymph HDL. These results suggest that, in the cholesterol-fed dog, cholesterol efflux into the interstitial spaces may occur in the absence of significant LCAT activity. Furthermore, our studies suggest that the subsequent reaction between lymph HDL and LCAT within the vascular compartment leads to the generation of apoprotein E and cholesteryl ester-rich cholesterol-induced HDL.