Impaired insulin secretion is one of the main causes of type 2 diabetes. Cholesterol accumulation-induced lipotoxicity contributes to impaired insulin secretion in pancreatic beta cells. However, the detailed mechanism in this process remains unclear. In this study, we proved that oxidized low-density lipoprotein (OxLDL) reduced insulin content, decreased PDX-1 expression, and impaired glucose-stimulated insulin secretion (GSIS) in INS-1 cells, which were rescued by addition of high-density lipoprotein (HDL). OxLDL receptors and cholesterol content were increased by OxLDL. Consistently, OxLDL suppressed cholesterol transporter ABCA1 expression and transcription in a dose-dependent and time-dependent manner. Inhibition of MEK by its specific inhibitor, PD98059, altered the effect of OxLDL on ABCA1 transcription and activation of ERK. Next, chromatin immunoprecipitation assay demonstrated that liver X receptor (LXR) could directly bind to ABCA1 promoter and this binding was inhibited by OxLDL. Furthermore, OxLDL decreased the nuclear LXR expression, which was prevented by HDL. LXR-enhanced ABCA1 transcription was suppressed by OxLDL, and the effect was cancelled by mutation of the LXR-binding sites. In summary, our study shows that OxLDL down-regulates ABCA1 expression by MEK/ERK/LXR pathway, leading to cholesterol accumulation in INS-1 cells, which may result in impaired insulin synthesis and GSIS.