Apolipoprotein (apo) E plays a major role in lipid metabolism by mediating cellular uptake of lipoprotein particles through interaction with members of the low density lipoprotein (LDL) receptor family. The primary region of apoE responsible for receptor binding has been limited to a cluster of basic amino acids between residues 134 and 150, located in the fourth helix of the N-terminal domain globular helix bundle structure. To investigate structural and functional requirements of this "receptor binding region" we engineered an apolipoprotein chimera wherein residues 131-151 of human apoE were substituted for residues 146-166 (helix 5) of Manduca sexta apolipophorin III (apoLp-III). Recombinant hybrid apolipoprotein was expressed in Escherichia coli, isolated, and characterized. Hybrid apolipoprotein and apoE3-N-terminal, but not apoLp-III, bound to heparin-Sepharose. Far UV circular dichroism spectroscopy revealed the presence of predominantly alpha-helix secondary structure, and stability studies revealed a urea denaturation midpoint of 1.05 m, similar to wild-type apoLp-III. Hybrid apolipoprotein-induced dimyristoylphosphatidylcholine (DMPC) bilayer vesicle solubilization activity was significantly enhanced compared with either parent protein, consistent with detection of solvent-exposed hydrophobic regions on the protein in fluorescent dye binding experiments. Unlike wild-type apoLp-III.DMPC complexes, disc particles bearing the hybrid apolipoprotein competed with 125ILDL for binding to the LDL receptor on cultured human skin fibroblasts. We conclude that a hybrid apolipoprotein containing a key receptor recognition element of apoE preserves the structural integrity of the parent protein while conferring a new biological activity, illustrating the potential of helix swapping to introduce desirable biological properties into unrelated or engineered apolipoproteins.