In human vascular smooth muscle cells, inhibitors of protein kinase C activity reduced serine phosphorylation of caveolin-1 and increased sterol binding by this protein. This was measured after immunoprecipitation of caveolin-1 from cells labeled with tritiated cholesterol or the photoactivable cholesterol analogue FCBP [Fielding et al. (2002) Biochemistry 41, 4929-4937]. At the same time cellular sterol efflux was inhibited. Mutagenesis within a caveolin-1 central domain (residues 80-104) suggested a major role for serine-80 in mediating both of these effects. To perturb sterol binding, platelet-derived growth factor was added to the cells, leading to a transient loss of caveolin-1-associated sterol. Under these conditions, sterol efflux was stimulated, and caveolin-1 phosphorylation at tyrosine(14), assayed with a selective antibody, was substantially increased above baseline levels. These changes were also blocked by inhibitors of protein kinase C activity. Selective inhibitors of the platelet-derived growth factor receptor and downstream kinases were used to show that loss of sterol from caveolin-1 preceded tyrosine phosphorylation, but relipidation was dependent on phosphotyrosine hydrolysis.