Activities of phospholipase D (PLD) in diverse subcellular organelles have been identified but the details of regulatory mechanisms in such locations are unknown. Protein kinase C (PKC) is a major regulator of PLD. Serine 2, threonine 147, and serine 561 residues of phospholipase D1 (PLD1) were determined as sites of phosphorylation by PKC (Kim, Y., Han, J. M., Park, J. B., Lee, S. D., Oh, Y. S., Chung, C., Lee, T. G., Kim, J. H., Park, S. K., Yoo, J. S., Suh, P. G., Ryu, S. H. (1999) Biochemistry 38, 10344-10351). In our present study, a triple mutation of these phosphorylation sites diminished markedly phorbol 12-myristate 13-acetate (PMA)-induced PLD1 activity in COS-7 cells. We looked at the location of the PLD1 phosphorylation by PKC by observing PMA induced band shifts and by use of anti-phospho-PLD1 monoclonal antibody. The shifted PMA-induced proteins and the immunoreactivity of the anti-phospho-PLD1 antibody were mainly found in the caveolin-enriched membrane (CEM) fraction. Depletion of cellular cholesterol led to a loss of this compartmentalization of phosphorylated PLD1 in the CEM. Replacement of the cellular cholesterol led to the restoration of phosphorylated PLD1 in the CEM. Immunocytochemical studies of COS-7 cells revealed that PLD1 was localized in the plasma membrane as well as in the vesicular structures in the cytoplasm, but the phosphorylation of PLD1 occurred only in the plasma membrane. Our results, therefore, show that phosphorylation, and thereby activation, of PLD1 by PKC occurs in the caveolin and cholesterol-enriched low density domain of the plasma membrane in COS-7 cells.