Foam cells are a hallmark of atherosclerosis. However, it is unclear whether foam cell formation per se protects against atherosclerosis or fuels it. In this study, we investigated the role of adipose differentiation-related protein (ADFP), a major lipid droplet protein (LDP), in the regulation of foam cell formation and atherosclerosis. We show that ADFP expression facilitates foam cell formation induced by modified lipoproteins in mouse macrophages in vitro. We show further that Adfp gene inactivation in apolipoprotein E–deficient (ApoE^−/−) mice reduces the number of lipid droplets in foam cells in atherosclerotic lesions and protects the mice against atherosclerosis. Moreover, transplantation of ADFP-null bone marrow-derived cells effectively attenuated atherosclerosis in ApoE^−/− mice. Deficiency of ADFP did not cause a detectable compensatory increase in the other PAT domain proteins in macrophages in vitro or in vivo. Mechanistically, ADFP enables the macrophage to maintain its lipid content by hindering lipid efflux. We detected no significant difference in lesion composition or in multiple parameters of inflammation in macrophages or in their phagocytic activity between mice with and without ADFP. In conclusion, Adfp inactivation in ApoE^−/− background protects against atherosclerosis and appears to be a relatively pure model of impaired foam cell formation.