Store-operated Ca(2+) entry (SOCE) is activated by redistribution of STIM1 into puncta in discrete ER-plasma membrane junctional regions where it interacts with and activates store-operated channels (SOCs). The factors involved in precise targeting of the channels and their retention at these specific microdomains are not yet defined. Here we report that caveolin-1 (Cav1) is a critical plasma membrane scaffold that retains TRPC1 within the regions where STIM1 puncta are localized following store depletion. This enables the interaction of TRPC1 with STIM1 that is required for the activation of TRPC1-SOCE. Silencing Cav1 in human submandibular gland (HSG) cells decreased plasma membrane retention of TRPC1, TRPC1-STIM1 clustering, and consequently reduced TRPC1-SOCE, without altering STIM1 puncta. Importantly, activation of TRPC1-SOCE was associated with an increase in TRPC1-STIM1 and a decrease in TRPC1-Cav1 clustering. Consistent with this, overexpression of Cav1 decreased TRPC1-STIM1 clustering and SOCE, both of which were recovered when STIM1 was expressed at higher levels relative to Cav1. Silencing STIM1 or expression of DeltaERM-STIM1 or STIM1((684)EE(685)) mutant prevented dissociation of TRPC1-Cav1 and activation of TRPC1-SOCE. However expression of TRPC1-((639)KK(640)) with STIM1((684)EE(685)) restored function and the dissociation of TRPC1 from Cav1 in response to store depletion. Further, conditions that promoted TRPC1-STIM1 clustering and TRPC1-SOCE elicited corresponding changes in SOCE-dependent NFkB activation and cell proliferation. Together these data demonstrate that Cav1 is a critical plasma membrane scaffold for inactive TRPC1. We suggest that activation of TRPC1-SOC by STIM1 mediates release of the channel from Cav1.