The tumor necrosis factor-related apoptosis-inducing ligand (TRAIL/Apo2L) offers promising therapeutic potential based on its ability to induce apoptosis in various cancer cell lines without obvious adverse effect to normal cells. However, the mechanism of the differential sensitivity towards TRAIL-induced apoptosis remains unclear. Here, we demonstrate that caveolin-1 directly regulated TRAIL-induced apoptosis in HepG2 cells. ShRNA-mediated caveolin knockdown sensitized TRAIL-induced apoptosis and disruption of caveolae structure by the cholesterol-extracting reagent, methyl-beta-cyclodextrin (MCD), enhanced TRAIL-induced apoptosis. Over-expression of caveolin-1 partially blocked TRAIL-induced apoptosis. The engagement of TRAIL with its receptor DR4 reduced the localization of DR4 in caveolae and resulted in its internalization. Blockade of caveolae-mediated internalization of DR4 by filipin III effectively enhanced TRAIL-induced apoptosis. Collectively, our results reveal a new mechanism by which caveolin-1 negatively regulates TRAIL-induced apoptosis in human hepatocarcinoma cells.