Angiotensin II (Ang II) induces transactivation of the epidermal growth factor (EGF) receptor (EGF-R), which serves as a scaffold for various signaling molecules in vascular smooth muscle cells (VSMCs). Cholesterol and sphingomyelin-enriched lipid rafts are plasma membrane microdomains that concentrate various signaling molecules. Caveolae are specialized lipid rafts that are organized by the cholesterol-binding protein, caveolin, and have been shown to be associated with EGF-Rs. Angiotensin II stimulation promotes a rapid movement of AT 1 receptors to caveolae; however, their functional role in angiotensin II signaling has not been elucidated. Here we show that cholesterol depletion by -cyclodextrin disrupts caveolae structure and concomitantly inhibits tyrosine phosphorylation of the EGF-R and subsequent activation of protein kinase B (PKB)/Akt induced by angiotensin II. Similar inhibitory effects were obtained with other cholesterol-binding agents, filipin and nystatin. In contrast, EGF-R autophosphorylation and activation of Akt/PKB in response to EGF are not affected by cholesterol depletion. The early Ang II-induced upstream signaling events responsible for transactivation of the EGF-R, such as the intracellular Ca 2؉ increase and c-Src activation, also remain intact. The EGF-R initially binds caveolin, but these two proteins rapidly dissociate following angiotensin II stimulation during the time when EGF-R transactivation is observed. The activated EGF-R is localized in focal adhesions together with tyrosinephosphorylated caveolin. These findings suggest that 1) a scaffolding role of caveolin is essential for EGF-R transactivation by angiotensin II and 2) cholesterol-rich microdomains as well as focal adhesions are important signal-organizing compartments required for the spatial and temporal organization of angiotensin II signaling in VSMCs.Angiotensin II (Ang II) 1 is a highly pluripotential hormone in vascular smooth muscle cells (VSMCs) and stimulates multiple signaling pathways, including Src family kinases, as well as mitogen-activated protein kinases (MAPKs) and Akt/protein kinase B (PKB), that mediate VSMC hypertrophy and growth via AT 1 receptors (AT 1 Rs). Increasing evidence suggests that transmodulation of the epidermal growth factor receptor (EGF-R), which serves as a scaffold for various signaling molecules, plays an essential role in organizing Ang II-mediated tyrosine kinase signaling pathways. We and others (1, 2) have demonstrated that EGF-R transactivation by Ang II is mediated through Ca 2ϩ , c-Src, and NADPH oxidase-derived reactive oxygen species, leading to activation of downstream signaling such as extracellular signal regulated kinase (ERK) and Akt/ PKB in VSMCs.Relatively little is known of the mechanisms controlling the spatial and temporal organization of AT 1 R signaling in VSMCs or of how specificity is achieved. We showed originally that Ang II signaling in VSMC is biphasic and that internalization or sequestration of the agonist-occupied receptor into a "signaling domain" ...