Development, angiogenesis, wound healing, and metastasis all involve the movement of cells in response to changes in the extracellular environment. To determine whether caveolin-1 plays a role in cell migration, we have used fibroblasts from knockout mice. Caveolin-1-deficient cells lose normal cell polarity, exhibit impaired wound healing, and have decreased Rho and increased Rac and Cdc42 GTPase activities. Directional persistency of migration is lost, and the cells show an impaired response to external directional stimuli. Both Src inactivation and p190RhoGAP knockdown restore the wild-type phenotype to caveolin-1-deficient cells, suggesting that caveolin-1 stimulates normal Rho GTP loading through inactivation of the Src-p190RhoGAP pathway. These findings highlight the importance of caveolin-1 in the establishment of cell polarity during directional migration through coordination of the signaling of Src kinase and Rho GTPases.