In the lung, caveolin-1 is expressed in both type I alveolar epithelial and endothelial cells where it is hypothesized to modulate molecular signaling activities and progression of tumorigenesis. Developmentally, caveolin-1␣ is expressed in fetal lung endothelial, but not epithelial, cells; in adult lung, both cell types express caveolin-1␣. To test the hypothesis that caveolin-1 transcription is differentially regulated in type I and endothelial cells, we characterized the proximal promoter of the mouse caveolin-1 gene in lung cell lines to identify factors that control its cell-specific expression. We show that caveolin-1 expression is regulated by an Ets ciselement in a lung epithelial cell line, but not a lung endothelial cell line, and that three ETS family members, ETS-1, PEA3, and ERM, recognize and bind the Ets site in the epithelial cell line. Based on these findings, we have identified the Ets cis-element as a region that accounts for differential transcriptional regulation of caveolin-1 in lung epithelial and endothelial cells.The caveolin-1 promoter of several species has been cloned and sequenced, yet little is known about the protein transcription factors and cis-elements that regulate its transcription. In NIH 3T3 cells, caveolin promoter constructs containing 750 bp or 3 kb of upstream sequence show similar promoter activity (1), suggesting that in this cell line most of the regulatory regions are contained within the first 750 bp of the caveolin-1 promoter. In normal human skin fibroblasts, the caveolin-1 promoter is regulated by Sp1, p53, E2F/DP-1, and serum-response element-specific enhancers (2), whereas in vascular smooth muscle cells increases in free cholesterol stimulate caveolin-1 transcription by an SREBP-1-dependent mechanism (3).The regulation of expression of caveolin-1 in the lung is especially interesting both because it is developmentally regulated and because two extensive cell populations expressing high levels of caveolin-1, i.e. alveolar epithelial type I cells and alveolar capillary endothelial cells, reside within a short distance from each other and therefore share many environmental influences (4). Furthermore, targeted deletions of caveolin-1 in mice show mainly a pulmonary phenotype, pulmonary hypertension as well as hyperproliferative and fibrotic lung tissue (5-7). Consistent with this hyperproliferative phenotype, embryonic fibroblasts derived from the null animals appear to have an increased rate of proliferation, which is partially reversed by re-expressing caveolin-1 protein from a viral expression vector (5). In intact animals loss of caveolin-1 leads to lung abnormalities at 2-4 months, about the same postnatal time point that caveolin-1␣ is first detectable by immunohistochemistry in type I cells in normal animals (4). The pulmonary phenotype appears to contribute to the shortened life span of the null animals although there are uncertainties about the actual cause of early death (8).Caveolin-1, the main structural protein of caveolae, is a 21-24-kDa integral me...