Caveolin-1 and -2 are the two major coat proteins found in plasma membrane caveolae of most of cell types. Here, by using adenoviral transduction of either caveolin-1 or caveolin-2 or both isoforms into cells lacking both caveolins, we demonstrate that caveolin-2 positively regulates caveolin-1-dependent caveolae formation. More importantly, we show that caveolin-2 is phosphorylated in vivo at two serine residues and that the phosphorylation of caveolin-2 is necessary for its actions as a positive regulator of caveolin-1 during organelle biogenesis in prostate cancer cells. Mutation of the primary phosphorylation sites on caveolin-2, serine 23 and 36, reduces the number of plasmalemma-attached caveolae and increases the accumulation of noncoated vesicles, but does not affect trafficking of caveolin-2, interaction with caveolin-1 or its biophysical properties. Thus, the phosphorylation of caveolin-2 is a novel mechanism to regulate the dynamics of caveolae assembly.