To understand the molecular basis for the different self-association and lipoprotein preferences of apolipoprotein (apo) E isoforms, we compared the effects of progressive truncation of the C-terminal domain in human apoE3 and apoE4 on their lipid-free structure and lipid binding properties. A VLDL/HDL distribution assay demonstrated that apoE3 binds much better than apoE4 to HDL 3, whereas both isoforms bind similarly to VLDL. Removal of the C-terminal helical regions spanning residues 273-299 weakened the ability of both isoforms to bind to lipoproteins; this led to the elimination of the isoform lipoprotein preference, indicating that the C-terminal helices mediate the lipoprotein selectivity of apoE3 and apoE4 isoforms. Gel filtration chromatography experiments demonstrated that the monomer-tetramer distribution is different for the two isoforms with apoE4 being more monomeric than apoE3 and that removal of the C-terminal helices favors the monomeric state in both isoforms. Consistent with this, fluorescence measurements of Trp-264 in single-Trp mutants revealed that the C-terminal domain in apoE4 is less organized and more exposed to the aqueous environment than in apoE3. In addition, the solubilization of dimyristoylphosphatidylcholine multilamellar vesicles is more rapid with apoE4 than with apoE3; removal of the C-terminal helices significantly affected solubilization rates with both isoforms. Taken together, these results indicate that the C-terminal domain is organized differently in apoE3 and apoE4 so that apoE4 self-associates less and binds less than apoE3 to HDL surfaces; these alterations may lead to the pathological sequelae for cardiovascular and neurodegenerative diseases.