The ATP-binding cassette transporter A1 (ABCA1) plays a critical role in the biogenesis of high density lipoprotein (HDL) particles and in mediating cellular cholesterol efflux. The mechanism by which ABCA1 achieves these effects is not established, despite extensive investigation. Here, we present a model that explains the essential features, especially the effects of ABCA1 activity in inducing apolipoprotein (apo) A-I binding to cells and the compositions of the discoidal HDL particles that are produced. The apo A-I/ABCA1 reaction scheme involves three steps. First, there is binding of a small regulatory pool of apo A-I to ABCA1, thereby enhancing net phospholipid translocation to the plasma membrane exofacial leaflet; this leads to unequal lateral packing densities in the two leaflets of the phospholipid bilayer. Second, the resultant membrane strain is relieved by bending and by creation of exovesiculated lipid domains. The formation of highly curved membrane surface promotes high affinity binding of apo A-I to these domains. Third, this pool of bound apo A-I spontaneously solubilizes the exovesiculated domain to create discoidal nascent HDL particles. These particles contain two, three, or four molecules of apo A-I and a complement of membrane phospholipid classes together with some cholesterol. A key feature of this mechanism is that membrane bending induced by ABCA1 lipid translocase activity creates the conditions required for nascent HDL assembly by apo A-I. Overall, this mechanism is consistent with the known properties of ABCA1 and apo A-I and reconciles many of the apparently discrepant findings in the literature.