Caveolin-1 is normally localized in plasma membrane caveolae and the Golgi apparatus in mammalian cells. We found three treatments that redirected the protein to lipid storage droplets, identified by staining with the lipophilic dye Nile red and the marker protein ADRP. Caveolin-1 was targeted to the droplets when linked to the ER-retrieval sequence, KKSL, generating Cav-KKSL. Cav-DeltaN2, an internal deletion mutant, also accumulated in the droplets, as well as in a Golgi-like structure. Third, incubation of cells with brefeldin A caused caveolin-1 to accumulate in the droplets. This localization persisted after drug washout, showing that caveolin-1 was transported out of the droplets slowly or not at all. Some overexpressed caveolin-2 was also present in lipid droplets. Experimental reduction of cellular cholesteryl ester by 80% did not prevent targeting of Cav-KKSL to the droplets. Cav-KKSL expression did not grossly alter cellular triacylglyceride or cholesteryl levels, although droplet morphology was affected in some cells. These data suggest that accumulation of caveolin-1 to unusually high levels in the ER causes targeting to lipid droplets, and that mechanisms must exist to ensure the rapid exit of newly synthesized caveolin-1 from the ER to avoid this fate.