TNF ligand-related molecule 1A (TL1A) is a vascular endothelial growth inhibitor to reduce neovascularization. Lack of apoE a expression results in hypercholesterolemia and atherosclerosis. In this study, we determined the precise effects of TL1A on the development of atherosclerosis and the underlying mechanisms in apoE-deficient mice. After 12 weeks of pro-atherogenic high-fat diet feeding and TL1A treatment, mouse aorta, serum, and liver samples were collected and used to assess atherosclerotic lesions, fatty liver, and expression of related molecules. We found that TL1A treatment significantly reduced lesions and enhanced plaque stability. Mechanistically, TL1A inhibited formation of foam cells derived from vascular smooth muscle cells (VSMCs) but not macrophages by activating expression of ABC transporter A1 (ABCA1), ABCG1, and cholesterol efflux in a liver X receptor-dependent manner. TL1A reduced the transformation of VSMCs from contractile phenotype into synthetic phenotypes by activating expression of contractile marker α smooth muscle actin and inhibiting expression of synthetic marker osteopontin, or osteoblast-like phenotype by reducing calcification. In addition, TL1A ameliorated high-fat diet-induced lipid metabolic disorders in the liver. Taken together, our work shows that TL1A can inhibit the development of atherosclerosis by regulating VSMC/foam cell formation and switch of VSMC phenotypes and suggests further investigation of its potential for atherosclerosis treatment.