Caveolae are 50- to 100-nm omega-shaped invaginations of the plasma membrane that function as regulators of signal transduction. Caveolins are a class of oligomeric structural proteins that are both necessary and sufficient for caveolae formation. Interestingly, caveolin-1 has been implicated in the pathogenesis of oncogenic cell transformation, tumorigenesis, and metastasis. Here, we review the available experimental evidence (gleaned from cultured cells, animal models, and human tumor samples) that caveolin-1 (Cav-1) functions as a "tumor and/or metastasis modifier gene." Genetic evidence from the study of Cav-1(-/-) null mice and human breast cancer mutations [CAV-1 (P132L)] supports the idea that caveolin-1 normally functions as a negative regulator of cell transformation and mammary tumorigenesis. In contrast, caveolin-1 may function as a tumor promoter in prostate cancers. We discuss possible molecular mechanisms to explain these intriguing, seemingly opposing, findings. More specifically, caveolin-1 phosphorylation (at Tyr14 and Ser80) and mutations (P132L) may override or inactivate the growth inhibitory activity of the caveolin-scaffolding domain (residues 82-101).