Surfactant is an apically-secreted surface-active material containing primarily disaturated phosphatidylcholine (DSPtdCho) that is released from alveolar epithelia into the alveolus. Surfactant deficiency is an important aspect of inflammatory lung disease and may result from extravasation of serum lipoproteins into the alveolus. We investigated whether one bioactive component of modified lipoproteins, oxysterols, might reduce surfactant PtdCho availability by altering its trafficking. The oxysterol, 22-hydroxycholesterol (22HC), in combination with its obligate partner, 9 cis-retinoic acid (RA), decreased surfactant PtdCho levels, in part, by stimulating basolateral phospholipid export in murine lung epithelia. 22HC/RA stimulated basolateral PtdCho efflux in cells via transcriptional activation of the ATP-binding cassette transporter 1 (ABCA1) gene. This effect was mediated by a DR-4 locus within the ABCA1 promoter. ABCA1 knockdown studies using ABCA1 siRNA or the ABCA1 inhibitor, glyburide, selectively attenuated 22HC/RA-driven basolateral PtdCho efflux. 22HC/RA significantly increased export of PtdCho molecular species containing saturated (16:0) fatty-acyl species typical of DSPtdCho. Overexpression of ABCA1 mimicked 22HC/RA effects by increasing cellular PtdCho efflux, whereas mutagenesis of ABCA1 at Trp590 attenuated PtdCho release. The results indicate the existence of an oxysterol-activated basolateral exit pathway for surfactant that might impact the availability of phospholipid destined for apical secretion.