Lipid rafts and caveolae are specialized membrane microdomains implicated in regulating G protein-coupled receptor signaling cascades. Previous studies have suggested that rafts/caveolae may regulate beta-adrenergic receptor/Galpha(s) signaling, but underlying molecular mechanisms are largely undefined. Using a simplified model system in C6 glioma cells, this study disrupts rafts/caveolae using both pharmacological and genetic approaches to test whether caveolin-1 and lipid microdomains regulate G(s) trafficking and signaling. Lipid rafts/caveolae were disrupted in C6 cells by either short-term cholesterol chelation using methyl-beta-cyclodextrin or by stable knockdown of caveolin-1 and -2 by RNA interference. In imaging studies examining Galpha(s)-GFP during signaling, stimulation with the betaAR agonist isoproterenol resulted in internalization of Galpha(s)-GFP; however, this trafficking was blocked by methyl-beta-cyclodextrin or by caveolin knockdown. Caveolin knockdown significantly decreased Galpha(s) localization in detergent insoluble lipid raft/caveolae membrane fractions, suggesting that caveolin localizes a portion of Galpha(s) to these membrane microdomains. Methyl-beta-cyclodextrin or caveolin knockdown significantly increased isoproterenol or thyrotropin-stimulated cAMP accumulation. Furthermore, forskolin- and aluminum tetrafluoride-stimulated adenylyl cyclase activity was significantly increased by caveolin knockdown in cells or in brain membranes obtained from caveolin-1 knockout mice, indicating that caveolin attenuates signaling at the level of Galpha(s)/adenylyl cyclase and distal to GPCRs. Taken together, these results demonstrate that caveolin-1 and lipid microdomains exert a major effect on Galpha(s) trafficking and signaling. It is suggested that lipid rafts/caveolae are sites that remove Galpha(s) from membrane signaling cascades and caveolins might dampen globally Galpha(s)/adenylyl cyclase/cAMP signaling.