OBJECTIVE - We investigated the differential roles of apolipoprotein E (apoE) isoforms in modulating diabetic dyslipidemia - a potential cause of the increased cardiovascular disease risk of patients with diabetes. RESEARCH DESIGN AND METHODS - Diabetes was induced using streptozotocin (STZ) in human apoE3 (E3) or human apoE4 (E4) mice deficient in the LDL receptor (LDLR -/-). RESULTS - Diabetic E3LDLR-/- and E4LDLR -/- mice have indistinguishable levels of plasma glucose and insulin. Despite this, diabetes increased VLDL triglycerides and LDL cholesterol in E4LDLR-/- mice twice as much as in E3LDLR-/- mice. Diabetic E4LDLR-/- mice had similar lipoprotein fractional catabolic rates compared with diabetic E3LDLR-/- mice but had larger hepatic fat stores and increased VLDL secretion. Diabetic E4LDLR-/- mice demonstrated a decreased reliance on lipid as an energy source based on indirect calorimetry. Lower phosphorylated acetyl-CoA carboxylase content and higher gene expression of fatty acid synthase in the liver indicated reduced fatty acid oxidation and increased fatty acid synthesis. E4LDLR-/- primary hepatocytes cultured in high glucose accumulated more intracellular lipid than E3LDLR-/- hepatocytes concomitant with a 60% reduction in fatty acid oxidation. Finally, the exaggerated dyslipidemia in diabetic E4LDLR2/2 mice was accompanied by a dramatic increase in atherosclerosis. CONCLUSIONS - ApoE4 causes severe dyslipidemia and atherosclerosis independent of its interaction with LDLR in a model of STZ-induced diabetes. ApoE4-expressing livers have reduced fatty acid oxidation, which contributes to the accumulation of tissue and plasma lipids.