Defective binding of apolipoprotein E (apoE) to heparan sulfate proteoglycans (HSPGs) is associated with increased risk of atherosclerosis due to inefficient clearance of lipoprotein remnants by the liver. The interaction of apoE with HSPGs has also been implicated in the pathogenesis of Alzheimer's disease and may play a role in neuronal repair. To identify which residues in the heparin-binding site of apoE and which structural elements of heparan sulfate interact, we used a variety of approaches, including glycosaminoglycan specificity assays, (13)C nuclear magnetic resonance, and heparin affinity chromatography. The formation of the high affinity complex required Arg-142, Lys-143, Arg-145, Lys-146, and Arg-147 from apoE and N- and 6-O-sulfo groups of the glucosamine units from the heparin fragment. As shown by molecular modeling, using a high affinity binding octasaccharide fragment of heparin, these findings are consistent with a binding mode in which five saccharide residues of fully sulfated heparan sulfate lie in a shallow groove of the alpha-helix that contains the HSPG-binding site (helix 4 of the four-helix bundle of the 22-kDa fragment). This groove is lined with residues Arg-136, Ser-139, His-140, Arg-142, Lys-143, Arg-145, Lys-146, and Arg-147. In the model, all of these residues make direct contact with either the 2-O-sulfo groups of the iduronic acid monosaccharides or the N- and 6-O-sulfo groups of the glucosamine sulfate monosaccharides. This model indicates that apoE has an HSPG-binding site highly complementary to heparan sulfate rich in N- and O-sulfo groups such as that found in the liver and the brain.