A metalloprotease, ADAM17, mediates the generation of mature ligands for the epidermal growth factor receptor (EGFR). This is the key signaling step by which angiotensin II (AngII) induces EGFR transactivation leading to hypertrophy and migration of vascular smooth muscle cells (VSMCs). However, the regulatory mechanism of ADAM17 activity remains largely unclear. Here we hypothesized that caveolin-1 (Cav1), the major structural protein of a caveolae, a membrane microdomain, is involved in the regulation of ADAM17. In cultured VSMCs, infection of adenovirus encoding Cav1 markedly inhibited AngII-induced EGFR ligand shedding, EGFR transactivation, ERK activation, hypertrophy and migration, but not intracellular Ca(2+) elevation. Methyl-β-cyclodextrin and filipin, reagents that disrupt raft structure, both stimulated an EGFR ligand shedding and EGFR transactivation in VSMCs. In addition, non-detergent sucrose gradient membrane fractionations revealed that ADAM17 cofractionated with Cav1 in lipid rafts. These results suggest that lipid rafts and perhaps caveolae provide a negative regulatory environment for EGFR transactivation linked to vascular remodeling induced by AngII. These novel findings may provide important information to target cardiovascular diseases under the enhanced renin angiotensin system.