Caveolin-1 (cav-1) is a multifunctional protein and major component of caveolae membranes serving important functions related to signal transduction, endocytosis, transcytosis, and molecular transport. We previously showed that cav-1 is overexpressed and secreted by metastatic prostate cancer cells. We now report that cav-1 gene transduction (Adcav-1) or recombinant cav-1 (rcav-1) protein treatment of cav-1-negative prostate cancer cell line LP-LNCaP or cav-1(-/-) endothelial cells potentiated VEGF-stimulated angiogenic signaling. Downregulation of cav-1 in prostate cancer cell line PC-3 or human umbilical vein endothelial cells (HUVECs) through cav-1 siRNA significantly reduced basal and VEGF-stimulated phosphorylation of VEGFR2 (Y951), PLCgamma1 (Y783) and/or Akt (S473 & T308) relative to those in control siRNA treated cells. Additionally rcav-1 stimulation of cav-1 siRNA treated HUVECs restored this signaling pathway. Confocal microscopy and immunoprecipitation analysis revealed association and colocalization of VEGFR2 and PLCgamma1 with cav-1 following VEGF stimulation in HUVECs. Interestingly, treatment of HUVECs with cav-1 scaffolding domain (CSD) caused significant reduction in the VEGF-stimulated phosphorylation of VEGFR2, PLCgamma1 and Akt suggesting that CSD inhibits cav-1-mediated angiogenic signaling. VEGF stimulation of HUVECs significantly increased tubule length and cell migration, but this stimulatory effect was significantly reduced by cav-1 siRNA and/or CSD treatment. The present study demonstrates that cav-1 regulates VEGF-stimulated VEGFR2 autophosphorylation and activation of downstream angiogenic signaling, possibly through compartmentalization of specific signaling molecules. Our results provide mechanistic insight into the role of cav-1 in prostate cancer and suggest the use of CSD as a therapeutic tool to suppress angiogenic signaling in prostate cancer.