Tumorigenesis is a multistep process that involves a series of genetic changes or "multiple hits," leading to alterations in signaling, proliferation, immortalization, and transformation. Many of the molecular factors that govern tumor initiation and progression remain unknown. Here, we evaluate the transformation suppressor potential of caveolin-1 (Cav-1) and its ability to cooperate with a well established tumor suppressor, the INK4a locus. To study the effects of loss of caveolin-1 on cellular transformation, we established immortalized primary mouse embryonic fibroblasts (MEFs) expressing and lacking caveolin-1 by interbreeding Cav-1 (+/+) and Cav-1 (-/-) mice with INK4a (-/-) mice. Analysis of these cells reveals that loss of caveolin-1 confers a significant growth advantage, as measured via cellular proliferation and cell cycle analysis. Loss of caveolin-1 in the INK4a (-/-) genetic background results in constitutive hyperactivation of the p42/44 MAP kinase cascade, decreased expression of p21Cip1, as well as cyclin D1 and PCNA overexpression, consistent with their hyperproliferative phenotype. Importantly, in cells lacking Cav-1 expression, transformation by activated oncogenes (H-RasG12V or v-Src) results in increased tumor growth in vivo (up to >40-fold). Finally, INK4a (-/-)/Cav-1 (-/-) mice demonstrate disturbed mammary epithelial ductal morphology, with hyperplasia, increased side-branching, and fibrosis. Our results provide important new evidence for the transformation suppressor properties of Cav-1 and the first molecular genetic evidence that Cav-1 cooperates with a tumor suppressor, namely the INK4a genetic locus.