1. Caveolae are small invaginations of the plasma membrane that have recently been implicated in signal transduction. In the present study, we have investigated whether caveolins, the principal protein of caveolae, also modulate volume-regulated anion channels (VRACs). 2. ICl,swell, the cell swelling-induced chloride current through VRACs, was studied in three caveolin-1-deficient cell lines: Caco-2, MCF-7 and T47D. 3. Electrophysiological measurements showed that ICl, swell was very small in these cells and that transient expression of caveolin-1 restored ICl,swell. The caveolin-1 effect was isoform specific: caveolin-1beta but not caveolin-1alpha upregulated VRACs. This correlated with a different subcellular distribution of caveolin-1alpha (perinuclear location) from caveolin-1beta (perinuclear and peripheral). 4. To explain the modulation of ICl, swell by caveolin-1 we propose that caveolin increases the availability of VRACs in the plasma membrane or, alternatively, that it plays a crucial role in the signal transduction cascade of VRACs.