Hepatic assembly of triacylglycerol (TAG)-rich very low density lipoproteins (VLDL) is achieved through recruitment of bulk TAG (presumably in the form of lipid droplets within the microsomal lumen) into VLDL precursor containing apolipoprotein (apo) B-100. We determined protein/lipid components of lumenal lipid droplets (LLD) in cells expressing recombinant human apoC-III (C3wt) or a mutant form (K58E, C3KE) initially identified in humans that displayed hypotriglyceridemia. Although expression of C3wt markedly stimulated secretion of TAGand apoB-100 asVLDL 1, the K58E mutation (located at the C-terminal lipid binding domain) abolished the effect in transfected McA-RH7777 cells and in apoc3-null mice. Metabolic labeling studies revealed that accumulation of TAG in LLD was decreased (by 50%) in cells expressing C3 KE. A Fat Western lipid protein overlay assay showed drastically reduced lipid binding of the mutant protein. Substituting Lys 58 with Arg demonstrated that the positive charge at position 58 is crucial for apoC-III binding to lipid and for promoting TAG secretion. On the other hand, substituting both Lys 58 and Lys 60 with Glu resulted in almost entire elimination of lipid binding and loss of function in promoting TAG secretion. Thus, the lipid binding domain of apoC-III plays a key role in the formation of LLD for hepatic VLDL assembly and secretion.