In carbon tetrachloride-induced liver cirrhosis, diminution of hepatic endothelial nitric oxide synthase (eNOS) activity may contribute to impaired hepatic vasodilation and portal hypertension. The mechanisms responsible for these events remain unknown; however, a role for the NOS-associated proteins caveolin and calmodulin has been postulated. The purpose of this study is to characterize the expression and cellular localization of the NOS inhibitory protein caveolin-1 in normal rat liver and to then examine the role of caveolin in conjunction with calmodulin in regulation of NOS activity in cholestatic portal hypertension. In normal liver, caveolin protein is expressed preferentially in nonparenchymal cells compared with hepatocytes as assessed by Western blot analysis of isolated cell preparations. Additionally, within the nonparenchymal cell populations, caveolin expression is detected within both liver endothelial cells and hepatic stellate cells. Next, studies were performed 4 wk after bile duct ligation (BDL), a model of portal hypertension characterized by prominent cholestasis, as evidenced by a significant increase in serum cholesterol in BDL animals. After BDL, caveolin protein levels from detergent-soluble liver lysates are significantly increased as assessed by Western blot analysis. Immunoperoxidase staining demonstrates that this increase is most prominent within sinusoids and venules. Additionally, caveolin-1 upregulation is associated with a significant reduction in NOS catalytic activity in BDL liver lysates, an event that is corrected with provision of excess calmodulin, a protein that competitively binds eNOS from caveolin. We conclude that, in cholestatic portal hypertension, caveolin may negatively regulate NOS activity in a manner that is reversible by excess calmodulin.