Upon epidermal growth factor treatment, phospholipase C-gamma1 (PLC-gamma1) translocates from cytosol to membrane where it is phosphorylated at tyrosine residues. Caveolae are small plasma membrane invaginations whose structural protein is caveolin. In this study, we show that the translocation of PLC-gamma1 and its tyrosine phosphorylation are localized in caveolae by caveolin-enriched low-density membrane (CM) preparation and immunostaining of cells. Pretreatment of cells with methyl-beta-cyclodextrin (MbetaCD), a chemical disrupting caveolae structure, inhibits the translocation of PLC-gamma1 to CM as well as phosphatidylinositol (PtdIns) turnover. However, MbetaCD shows no effect on tyrosine phosphorylation level of PLC-gamma1. Our findings suggest that, for proper signaling, PLC-gamma1 phosphorylation has to occur at PtdInsP(2)-enriched sites.