The crystal structure of a C-terminal deletion of apolipoprotein A-I (apoA1) shows a large helical bundle structure in the amino half of the protein, from residues 8 to 115. Using site directed mutagenesis, guanidine or thermal denaturation, cell free liposome clearance, and cellular ABCA1-mediated cholesterol efflux assays, we demonstrate that apoA1 lipidation can occur when the thermodynamic barrier to this bundle unfolding is lowered. The absence of the C-terminus renders the bundle harder to unfold resulting in loss of apoA1 lipidation that can be reversed by point mutations, such as Trp8Ala, and by truncations as short as 8 residues in the amino terminus, both of which facilitate helical bundle unfolding. Locking the bundle via a disulfide bond leads to loss of apoA1 lipidation. We propose a model in which the C-terminus acts on the N-terminus to destabilize this helical bundle. Upon lipid binding to the C-terminus, Trp8 is displaced from its interaction with Phe57, Arg61, Leu64, Val67, Phe71, and Trp72 to destabilize the bundle. However, when the C-terminus is deleted, Trp8 cannot be displaced, the bundle cannot unfold, and apoA1 cannot be lipidated.