The c-Myc oncoprotein contributes to oncogenesis by activating and repressing a repertoire of genes involved in cellular proliferation, metabolism, and apoptosis. Increasing evidence suggests that the repressor function of c-Myc is critical for transformation. Therefore, identifying and characterizing Myc-repressed genes is imperative to understanding the mechanisms of Myc-induced tumorigenesis. Here, we employ NIH 3T3 cell lines harboring c-Myc-ER or N-Myc-ER to dissect the relationship between Myc activation and caveolin-1 expression. In this well-established inducible system, treatment with estrogen like molecules, such as tamoxifen, leads to activation of Myc, but in a tightly controlled fashion. Using this approach, we show that Myc activation induces the repression of caveolin-1 expression at the transcriptional level. We also provide two independent lines of evidence suggesting that caveolin-1 is a direct target of Myc: (i) the effect of Myc activation on caveolin-1 expression is independent of new protein synthesis, as revealed through the use of cycloheximide; and (ii) Myc-mediated repression of the caveolin-1 promoter is dependent on an intact INR sequence. Moreover, we show that expression of caveolin-1, via an adenoviral vector approach, can suppress cell transformation that is mediated by Myc activation. In support of these observations, treatment with an adenoviral vector harboring anti-sense caveolin-1 specifically potentiates transformation induced by Myc activation. Taken together, our results indicate that caveolin-1 is a direct target of Myc repression, and they also provide evidence for an additional mechanism by which Myc repression can elicit a malignant phenotype.