The N-terminal domain of human apolipoprotein E3 (apoE3) adopts an elongated, globular four helix bundle conformation in the lipid-free state. Upon lipid binding, the protein is thought to undergo a significant conformational change that is essential for manifestation of its low density lipoprotein receptor recognition properties. We have used fluorescence resonance energy transfer (FRET) to characterize helix repositioning which accompanies lipid interaction of this protein. ApoE3(1-183) possesses a single cysteine at position 112 and four tryptophan residues (positions 20, 26, 34, and 39). Modification of Cys112 with the chromophore, N-iodoacetyl-N'-(5-sulfo-1-naphthyl)etheylenediamine (AEDANS) was specific and did not alter the secondary structure content of the protein. The efficiency of energy transfer from donor Trp residues to the AEDANS moiety was 49% in buffer, consistent with close proximity of the chromophores. Guanidine HCl titration experiments induced characteristic changes in the efficiency of energy transfer, indicating that FRET data faithfully reports on the conformational status of the protein. Interaction of AEDANS-apoE3(1-183) with dimyristoylphosphatidylcholine to form disk particles, or with detergent micelles, resulted in large decreases in the efficiency of energy transfer. Distance calculations based on the FRET measurements revealed that lipid binding increases the average distance between the four Trp donors and the AEDANS acceptor from 23 A to 44 A. The results obtained demonstrate the utility of FRET to investigate conformational adaptations of exchangeable apolipoproteins and are consistent with the hypothesis that, upon lipid binding, apoE3(1-183) undergoes conformational opening, repositioning helix 1 and 3 to adopt a receptor-active conformation.