Reactive oxygen species (ROS) can induce premature cellular senescence, which is believed to contribute to aging and age-related diseases. The nuclear erythroid 2 p45-related factor-2 (Nrf2) is a transcription factor that mediates cytoprotective responses against stress. We demonstrate that caveolin-1 is a direct binding partner of Nrf2, as shown by the binding of the scaffolding domain of caveolin-1 (amino acids 82-101) to the caveolin-binding domain of Nrf2 (amino acids 281-289). Biochemical studies show that Nrf2 is concentrated into caveolar membranes in human and mouse fibroblasts, where it colocalizes with caveolin-1, under resting conditions. After oxidative stress, caveolin-1 limits the movement of Nrf2 from caveolar membranes to the nucleus. In contrast, Nrf2 is constitutively localized to the nucleus before and after oxidative stress in caveolin-1-null mouse embryonic fibroblasts (MEFs), which do not express caveolin-1. Functional studies demonstrate that caveolin-1 acts as an endogenous inhibitor of Nrf2, as shown by the enhanced up-regulation of NQO1, an Nrf2 target gene, in caveolin-1-null MEFs and the activation or inhibition of a luciferase construct carrying an antioxidant responsive element (ARE) after down-regulation of caveolin-1 by small interfering RNA or overexpression of caveolin-1, respectively. Expression of a mutant form of Nrf2 that cannot bind to caveolin-1 (Φ→A-Nrf2) hyperactivates ARE and inhibits oxidative stress-induced activation of the p53/p21(Waf1/Cip1) pathway and induction of premature senescence in fibroblasts. Finally, we show that overexpression of caveolin-1 in colon cancer cells inhibits oxidant-induced activation of Nrf2-dependent signaling, promotes premature senescence, and inhibits their transformed phenotype. Thus, by inhibiting Nrf2-mediated signaling, caveolin-1 links free radicals to the activation of the p53/senescence pathway.