Caveolin-1 is an integral membrane protein primarily responsible for the formation of membrane structures known as caveolae. Caveolae are specialized lipid rafts involved in protein trafficking, cholesterol homeostasis, and a number of signaling functions. It has been demonstrated that caveolin-1 suppresses HIV-1 protein expression. We found that co-transfecting cells with HIV-1 and caveolin-1 constructs, results in a marked decrease in the level of HIV-1 transcription relative to cells transfected with HIV-1 DNA alone. Correspondingly, reduction of endogenous caveolin-1 expression by siRNA-mediated silencing resulted in an enhancement of HIV-1 replication. Further, we observed a loss of caveolin-mediated suppression of HIV-1 transcription in promoter studies with reporters containing mutations in the NF-κB binding site. Our analysis of the posttranslational modification status of the p65 subunit of NF-κB demonstrates hypoacetylation of p65 in the presence of caveolin-1. Since hypoacetylated p65 has been shown to inhibit transcription, we conclude that caveolin-1 inhibits HIV-1 transcription through a NF-κB-dependent mechanism.