Transcription of the human caveolin gene, directed by a TATA-less promoter, is downregulated in actively dividing cells during S-phase, together with free cholesterol (FC) efflux. It is upregulated by medium low density lipoprotein FC levels in quiescent cells. In this study, a common mechanism has been identified to coordinate the growth- and FC-dependent expression of caveolin. In human skin fibroblasts, transcription factors E2F/DP-1 and Sp1 bound to adjacent consensus sites at -151 to -138 bp of the caveolin promoter DNA sequence in a complex stabilized by tumor suppressor protein p53. Wild-type p53 also bound directly to DNA to a caveolin promoter sequence containing two consensus half-sites (-292 to -283 bp and -273 to -264 bp) for this transcription factor. SREBP-1, previously identified as a transcriptional regulator of caveolin expression in response to FC, mediated its effect via the same E2F/Sp1 site. Overexpression of E2F or p53 increased E2F binding to the -148 to -141 bp site, increased FC efflux, and inhibited cell division. The mutant protein p53(143V-->A) was inactive. Okadaic acid, previously shown to inhibit growth, FC efflux, and caveolin expression, inhibited E2F/Sp1 binding, while higher concentrations of extracellular FC increased it. The present findings provide a molecular link between the cell cycle and FC homeostatic effects of caveolin. These results also describe a novel mechanism of action for p53 in a TATA-less gene promoter and provide further evidence for a significant regulatory role for FC in cell cycle progression.