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Recent work has demonstrated that apo E secretion and accumulation increase in the regenerating peripheral nerve. The fact that apoE, in conjunction with apoA-I and LDL receptors, participates in a well-established lipid transfer system raised the possibility that apoE is also involved in lipid transport in the injured nerve. In the present study of the crushed rat sciatic nerve, a combination of techniques was used to trace the cellular associations of apoE, apoA-I, and the LDL receptor during nerve repair and to determine the distribution of lipid at each stage. After a crush injury, as axons died and Schwann cells reabsorbed myelin, resident and monocyte-derived macrophages produced large quantities of apoE distal to the injury site. As axons regenerated in the first week, their tips contained a high concentration of LDL receptors. After axon regeneration, apoE and apoA-I began to accumulate distal to the injury site and macrophages became increasingly cholesterol-loaded. As remyelination began in the second and third weeks after injury, Schwann cells exhausted their cholesterol stores, then displayed increased LDL receptors. Depletion of macrophage cholesterol stores followed over the next several weeks. During this stage of regeneration, apoE and apoA-I were present in the extracellular matrix as components of cholesterol-rich lipoproteins. Our results demonstrate that the regenerating peripheral nerve possesses the components of a cholesterol transfer mechanism, and the sequence of events suggests that this mechanism supplies the cholesterol required for rapid membrane biogenesis during axon regeneration and remyelination.