Familial defective apolipoprotein B100 (FDB) is caused by a mutation of apo-B100 (R3500Q) that disrupts the receptor binding of low density lipoproteins (LDL), which leads to hypercholesterolemia and premature atherosclerosis. In this study, mutant forms of human apo-B were expressed in transgenic mice, and the resulting human recombinant LDL were purified and tested for their receptor-binding activity. Site-directed mutagenesis and other evidence indicated that Site B (amino acids 3,359-3,369) binds to the LDL receptor and that arginine-3,500 is not directly involved in receptor binding. The carboxyl-terminal 20% of apo-B100 is necessary for the R3500Q mutation to disrupt receptor binding, since removal of the carboxyl terminus in FDB LDL results in normal receptor-binding activity. Similarly, removal of the carboxyl terminus of apo-B100 on receptor-inactive VLDL dramatically increases apo-B-mediated receptor-binding activity. We propose that the carboxyl terminus normally functions to inhibit the interaction of apo-B100 VLDL with the LDL receptor, but after the conversion of triglyceride-rich VLDL to smaller cholesterol-rich LDL, arginine-3,500 interacts with the carboxyl terminus, permitting normal interaction between LDL and its receptor. Moreover, the loss of arginine at this site destabilizes this interaction, resulting in receptor-binding defective LDL.