The lymphatic system maintains tissue fluid balance, and its dysfunction can result in lymphedema. Although cholesterol is essential for cellular function, its role in lymphatic development has remained unknown. Here, we identify APOA1 binding protein (AIBP) as a key regulator that promotes lymphatic endothelial cell fate specification and lymphangiogenesis. Mechanistically, AIBP reduces plasma membrane cholesterol content, thereby enhancing VEGFR3 signaling by disrupting caveolae—small plasma membrane invaginations formed by the scaffolding protein caveolin-1 (CAV-1)—and relieving CAV-1–mediated inhibition. In zebrafish and mice, AIBP loss impairs VEGFR3 signaling and lymphatic development, defects that can be rescued by CAV-1 deletion or by a VEGFR3 mutant (VEGFR3^AAA) lacking CAV-1 binding. Administration of recombinant AIBP augments VEGFC-induced lymphangiogenesis and accelerates the resolution of secondary lymphedema in adult mice. These findings define the AIBP–CAV-1 axis as a regulator of VEGFR3 signaling and lymphatic growth, offering potential therapeutic opportunities for treating lymphatic dysfunction.