When cells are migrating, caveolin-1, the principal protein component of caveolae, is excluded from the leading edge and polarized at the cell rear. The dynamic feature depends on a specific sequence motif that directs intracellular trafficking of the protein. Deletion mutation analysis revealed a putative polarization domain at the N terminus of caveolin-1, between amino acids 32-60. Alanine substitution identified a minimal sequence of 10 residues ((46)TKEIDLVNRD(55)) necessary for caveolin-1 rear polarization. Interestingly, deletion of amino acids 1-60 did not prevent the polarization of caveolin-1 in human umbilical vein endothelial cells or wild-type mouse embryonic fibroblasts because of an interaction of Cav(61-178) mutant with endogenous caveolin-1. Surprisingly, expression of the depolarization mutant in caveolin-1 null cells dramatically impeded caveolae formation. Furthermore, knockdown of caveolae formation by methyl-beta-cyclodextrin failed to prevent wild-type caveolin-1 rear polarization. Importantly, genetic depletion of caveolin-1 led to disoriented migration, which can be rescued by full-length caveolin-1 but not the depolarization mutant, indicating a role of caveolin-1 polarity in chemotaxis. Thus, we have identified a sequence motif that is essential for caveolin-1 rear polarization and caveolae formation.