Transgenic over expression of apolipoprotein A-I (ApoA-I) the major structural apolipoprotein of HDL appears to convey the most consistent and strongest anti atherogenic effect observed in animal models so far. We tested the hypothesis that ApoA-I mediates its cardio protective effects additionally through ApoA-I induced differentiation of bone marrow-derived progenitor cells in vitro. This study demonstrates that lineage negative bone marrow cells (lin- BMCs) alter and differentiate in response to free ApoA-I. We find that lin- BMCs in culture treated with recombinant free ApoA-I at a concentration of 0.4 μM are twice as large in size and have altered cell morphology compared to untreated cells; untreated cells retain the original spheroid morphology. Further, the total number of CD31 positive cells in the ApoA-I treated population consistently increased by two fold. This phenotype was significantly reduced in untreated cells and points towards a novel ApoA-I dependent differentiation. A protein lacking its best lipid-binding region (ApoA-IΔ10) did not stimulate any changes in the lin-BMCs indicating that ApoA-I may mediate its effects by regulating cholesterol efflux. The increased CD31 correlates with an increased ability of the lin- BMCs to adhere to both fibronectin and mouse brain endothelial cells. Our results provide the first evidence that exogenous free ApoA-I has the capacity to change the characteristics of progenitor cell populations and suggests a novel mechanism by which HDL may mediate its cardiovascular benefits.