ATP-binding cassette transporter G1 (ABCG1) effluxes cholesterol from macrophages and plays an important role in pulmonary lipid homeostasis. We hypothesize that macrophages from Abcg1−/− mice have increased inflammatory activity, thereby promoting acceleration of pulmonary disease. We herein demonstrate increased numbers of inflammatory cytokines and infiltrating neutrophils, eosinophils, dendritic cells, T cells, and B cells into lungs of Abcg1−/− mice before the onset of severe lipidosis. We further investigated the role of macrophages in causing pulmonary disease by performing bone marrow transplantations using B6 and Abcg1−/− bone marrow. We found that it was the macrophage, and not pneumocyte type II cells or other nonhematopoietic cells in the lung, that appeared to be the primary cell type involved in the onset of both pulmonary lipidosis and inflammation in the Abcg1−/− mice. Additionally, our results demonstrate that Abcg1−/− macrophages had elevated proinflammatory cytokine production, increased apoptotic cell clearance, and were themselves more prone to apoptosis and necrosis. However, they were quickly repopulated by monocytes that were recruited to Abcg1−/− lungs. In conclusion, we have shown that ABCG1 deletion in macrophages causes a striking inflammatory phenotype and initiates onset of pulmonary lipidosis in mice. Thus, our studies reveal a critical role for macrophage ABCG1 in lung inflammation and homeostasis.