We have examined the expression of caveolin in MDCK cells under conditions that vary cellular cholesterol concentration. Caveolin mRNA levels dropped to one-sixth of control levels after treatment with simvastatin, an inhibitor of cholesterol synthesis, or beta-trimethyl cyclodextrin (CD), a cholesterol sequestering drug. Both simvastatin and CD treatment decreased total cellular cholesterol levels to about 50% of control values. The potent activator of the sterol regulatory element, 25-hydroxycholesterol, showed no direct regulation of caveolin mRNA levels. Caveolin protein concentration was also decreased to 50% of control values in cholesterol-depleted cells, giving rise to a severe attenuation of caveolin expression detected by indirect immunofluorescence labeling. Quantitative electron microscopy showed a total loss of morphologically recognizable invaginated caveolae after these cholesterol depletion treatments. When the number of invaginated caveolae per cell was expressed as a function of the cellular cholesterol content, a threshold phenomenon was observed, suggesting that caveolae only form when the steady state cellular cholesterol is above 50% of control values. These findings indicate that caveolins, and caveolae, may play an important part in cellular cholesterol homeostasis.