Cells have evolved multiple mechanisms for maintaining cholesterol homeostasis, and, among these, ATP-binding cassette protein A1 (ABCA1)-mediated cholesterol efflux is highly regulated at the transcriptional level through the activity of the nuclear receptor liver X receptor (LXR). Here, we show that in addition to its well defined role in transcription, LXR beta directly binds to the C-terminal region ((2247)LTSFL(2251)) of ABCA1 to mediate its post-translational regulation. In the absence of cholesterol accumulation in the macrophage-like cell line THP-1, the ABCA1-LXR beta complex stably localizes to the plasma membrane, but apolipoprotein A-I (apoA-I) binding or cholesterol efflux does not occur. Exogenously added LXR ligands, which mimic cholesterol accumulation, cause LXR beta to dissociate from ABCA1, thus freeing ABCA1 for apoA-I binding and subsequent cholesterol efflux. Photoaffinity labeling experiments with 8-azido-[alpha-(32)P] ATP showed that the interaction of LXR beta with ABCA1 inhibits ATP binding by ABCA1. This is the first study to show that a protein-protein interaction with the endogenous protein suppresses the function of ABC proteins by inhibiting ATP binding. LXR beta can cause a post-translational response by binding directly to ABCA1, as well as a transcriptional response, to maintain cholesterol homeostasis.