Background: Cholesterol-loading of mouse aortic vascular smooth muscle cells (mVSMCs) downregulates miR-143/145, a master regulator of the contractile state downstream of TGFβ signaling. In vitro, this results in transitioning from a contractile mVSMC to a macrophage-like state. This process likely occurs in vivo based on studies in mouse and human atherosclerotic plaques. Objectives: To test whether cholesterol-loading reduces VSMC TGFβ signaling and if cholesterol efflux will restore signaling and the contractile state in vitro and in vivo. Methods: Human coronary artery (h)VSMCs were cholesterol-loaded, then treated with HDL (to promote cholesterol efflux). For in vivo studies, partial conditional deletion of Tgfβr2 in lineage-traced VSMC mice was induced. Mice wild-type for VSMC Tgfβr2 or partially deficient (Tgfβr2+/-) were made hypercholesterolemic to establish atherosclerosis. Mice were then treated with apoA1 (which forms HDL). Results: Cholesterol-loading of hVSMCs downregulated TGFβ signaling and contractile gene expression; macrophage markers were induced. TGFβ signaling positively regulated miR-143/145 expression, increasing Acta2 expression and suppressing KLF4. Cholesterol-loading localized TGFβ receptors into lipid rafts, with consequent TGFβ signaling downregulation. Notably, in cholesterol-loaded hVSMCs HDL particles displaced receptors from lipid rafts and increased TGFβ signaling, resulting in enhanced miR-145 expression and decreased KLF4-dependent macrophage features. ApoA1 infusion into Tgfβr2+/- mice restored Acta2 expression and decreased macrophage-marker expression in plaque VSMCs, with evidence of increased TGFβ signaling. Conclusions: Cholesterol suppresses TGFβ signaling and the contractile state in hVSMC through partitioning of TGFβ receptors into lipid rafts. These changes can be reversed by promotion of cholesterol efflux, consistent with evidence in vivo.