Caveolae are plasma membrane-attached vesicular organelles. Caveolin-1, a 21-24-kDa integral membrane protein, is a principal component of caveolae membranes in vivo. Both caveolae and caveolin are most abundantly expressed in terminally differentiated cells: adipocytes, endothelial cells, and muscle cells. Conversely, caveolin-1 mRNA and protein expression are lost or reduced during cell transformation by activated oncogenes such as v-abl and H-ras (G12V); caveolae are absent from these cell lines. However, its remains unknown whether down-regulation of caveolin-1 protein and caveolae organelles contributes to their transformed phenotype. Here, we have expressed caveolin-1 in oncogenically transformed cells under the control of an inducible-expression system. Regulated induction of caveolin-1 expression was monitored by Western blot analysis and immunofluorescence microscopy. Our results indicate that caveolin-1 protein is expressed well using this system and correctly localizes to the plasma membrane. Induction of caveolin-1 expression in v-Abl-transformed and H-Ras (G12V)-transformed NIH 3T3 cells abrogated the anchorage-independent growth of these cells in soft agar and resulted in the de novo formation of caveolae as seen by transmission electron microscopy. Consistent with its antagonism of Ras-mediated cell transformation, caveolin-1 expression dramatically inhibited both Ras/MAPK-mediated and basal transcriptional activation of a mitogen-sensitive promoter. Using an established system to detect apoptotic cell death, it appears that the effects of caveolin-1 may, in part, be attributed to its ability to initiate apoptosis in rapidly dividing cells. In addition, we find that caveolin-1 expression levels are reversibly down-regulated by two distinct oncogenic stimuli. Taken together, our results indicate that down-regulation of caveolin-1 expression and caveolae organelles may be critical to maintaining the transformed phenotype in certain cell populations.