The epsilon4 allele of apolipoprotein E (apoE) is associated with increased risk for Alzheimer's disease (AD) and poor outcome after brain injury. In the CNS, apoE is expressed by glia, predominantly astrocytes. To define the potential biological functions of different human apoE isoforms produced within the brain, transgenic mice were generated in which human apoE3 and apoE4 expression is under control of the astrocyte-specific glial fibrillary acidic protein (GFAP) promoter. These animals were then bred back to apoE knock-out mice. Human apoE protein is found within astrocytes and the neuropil throughout development and into the adult period, as assessed by immunocytochemistry and immunoblot analysis in several GFAP-apoE3 and E4 lines. Cultured astrocytes from these mice secrete apoE3 and apoE4 in lipoproteins that are high-density lipoprotein-like in size. When primary hippocampal neurons are grown in the presence of astrocyte monolayers derived from these transgenic mice, there is significantly greater neurite outgrowth from neurons grown in the presence of apoE3-secreting astrocytes compared with apoE4-secreting or apoE knock-out astrocytes. These effects are not dependent on direct astrocyte-neuron contact and appear to require the low-density lipoprotein receptor-related protein. These data suggest that astrocyte-secreted, apoE3-containing lipoproteins have different biological effects than apoE4-containing lipoproteins. In addition to providing information regarding the role of astrocyte-secreted apoE lipoproteins in the normal brain, these animals will also be useful in models of both AD and CNS injury.