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MDR1/ABCB1, a member of the ABC group of proteins, is clinically important because it is not only involved in multidrug resistance in cancer but also affects the pharmacokinetic properties of various drugs. The most puzzling feature of MDR1 is that it recognizes and transports such a wide variety of substrates. In the present review, the function of MDR1 is compared with that of other ABC proteins, particularly MDR2/ABCB4, to understand the mechanism of drug recognition and transport by MDR1. MDR2, the amino acid sequence of which has 86% similarity to that of MDR1, excretes phosphatidylcholine and cholesterol in the presence of bile salts. ABCA1 transfers phospholipids, preferentially phosphatidylcholine, and cholesterol to lipid-free apoA-I to generate pre-β-HDL, and ABCG1 excretes phospholipids, preferentially sphingomyelin, and cholesterol. Cholesterol also binds directly to MDR1 and modulates substrate recognition by MDR1. Cholesterol may fill the empty space of the drug-binding site and aid the recognition of small drugs, and facilitates the ability of MDR1 to recognize compounds with various structures and molecular weights. Eukaryote ABC proteins may retain similar substrate binding pockets and move bound substrates in an ATP-dependent manner. The prototype of eukaryote ABC proteins might be those involved in membrane lipid transport. (Cancer Sci 2007; 98: 1303–1310)