Gastric cancer cells are insensitive to tumor necrosis factor-related apoptosis-inducing ligand (TRAIL), and we recently showed that lipid raft-regulated epidermal growth factor receptor (EGFR) activation antagonized TRAIL-induced apoptosis. However, it is not clear whether caveolin-1, an essential structural constituent of lipid rafts, regulates lipid raft-mediated EGFR activation. We report here that TRAIL induced the translocation of EGFR into lipid rafts and its activation in gastric cancer SGC-7901 and MGC-803 cells. Simultaneously, caveolin-1 was also activated. Knockdown of caveolin-1 partially prevented EGFR activation and increased TRAIL sensitivity. Moreover, TRAIL promoted the translocation of Src into lipid rafts and its activation, as well as the interaction of Src with both EGFR and caveolin-1. A Src inhibitor prevented these interactions and the activation of caveolin-1 and EGFR, and thus enhanced TRAIL-induced apoptosis. These data suggest that Src activates EGFR through the interaction of both Src-EGFR and Src-caveolin-1, and then antagonizes TRAIL-induced apoptosis in gastric cancer cells.