In eukaryotic cells, calcium entry across the cell surface activates nuclear gene expression, a process critically important for cell growth and differentiation, learning, and memory and immune cell functions. In immune cells, calcium entry occurs through store-operated Ca 2؉ release-activated Ca 2؉ (CRAC) channels, comprised of STIM1 and Orai1 proteins. Local calcium entry through CRAC channels activates expression of c-fos-and nuclear factor of activated T cells (NFAT)-dependent genes. Although c-fos and NFAT often interact to activate gene expression synergistically, they can be activated independently of one another to regulate distinct genes. This raises the question of how one transcription factor can be activated and not the other when both are stimulated by the same trigger. Here, we show that the lipid raft scaffolding protein caveolin-1 interacts with the STIM1-Orai1 complex to increase channel activity. Phosphorylation of tyrosine 14 on caveolin-1 regulates CRAC channel-evoked c-fos activation without impacting the NFAT pathway or Orai1 activity. Our results reveal that structurally distinct domains of caveolin-1 selectively regulate the ability of local calcium to activate distinct transcription factors. More generally, our findings reveal that modular regulation by a scaffolding protein provides a simple, yet effective, mechanism to tunnel a local signal down a specific pathway. microdomains near open CRAC channels in the RBL-1 mast cell line stimulate activity of the transcription factors c-fos (5, 6), encoded by an immediate-early gene and a component of the nuclear AP-1 complex, and the nuclear factor of activated T cells (NFAT), with subsequent NFAT-dependent gene expression (7,8). NFAT and AP-1 are considered partners in transcriptional regulation, because composite NFAT and AP-1 sites are found in many genes that are activated during an immune response, and these transcription factors often interact cooperatively (9, 10). Genes that encode interleukin-2 (IL-2), -3, and -4 and granulocyte-macrophage colony-stimulating factor are transcribed when both NFAT and c-fos are activated (11), whereas transcription of other genes, such as the IL-13 and tumor necrosis factor alpha genes, is induced by NFAT alone (11). Hence, different patterns of gene expression can be evoked, depending on whether NFAT and c-fos operate together or in isolation. Because the same trigger of local Ca 2ϩ through CRAC channels activates both transcription factors in RBL cells (5-7), we reasoned that mechanisms must exist to tunnel the Ca 2ϩ microdomain down one pathway and not the other. Ca 2ϩ microdomains activate NFAT and c-fos indirectly, through recruitment of AKAP79 and calcineurin (12) and of Syk and Stat5 (6), respectively. We therefore posited that a large plasma membrane scaffolding protein that interacts with numerous signaling molecules might determine which transcription factor is activated by the local Ca 2ϩ signal. One such candidate protein is caveolin-1, which forms a large oligomeric complex (13), often inte...