Recent evidence supports the existence of a plasma membrane ER. In many cells, E2 activates signal transduction and cell proliferation, but the steroid inhibits signaling and growth in other cells. These effects may be related to interactions of ER with signal-modulating proteins in the membrane. It is also unclear how ER moves to the membrane. Here, we demonstrate ER in purified vesicles from endothelial cell plasma membranes and colocalization of ERalpha with the caveolae structural coat protein, caveolin-1. In human vascular smooth muscle or MCF-7 (human breast cancer) cell membranes, coimmunoprecipitation shows that ER associates with caveolin-1 and -2. Importantly, E2 rapidly and differentially stimulates ER-caveolin association in vascular smooth muscle cells but inhibits association in MCF-7 cells. E2 also stimulates caveolin-1 and -2 protein synthesis and activates a caveolin-1 promoter/luciferase reporter in smooth muscle cells. However, the steroid inhibits caveolin synthesis in MCF-7 cells. To determine a function for caveolin-ER interaction, we expressed caveolin-1 in MCF-7 cells. This stimulated ER translocation to the plasma membrane and also inhibited E2-induced ERK (MAPK) activation. Both functions required the caveolin-1 scaffolding domain. Depending upon the target cell, membrane ERs differentially associate with caveolin, and E2 differentially modulates the synthesis of this signaling-inhibitory scaffold protein. This may explain the discordant signaling and actions of E2 in various cell types. In addition, caveolin-1 is capable of facilitating ER translocation to the membrane.