P-glycoprotein (P-gp), an adenosine triphosphate (ATP)-binding cassette transporter which acts as a drug efflux pump, is highly expressed at the blood-brain barrier (BBB) where it plays an important role in brain protection. Recently, P-gp has been reported to be located in the caveolae of multidrug-resistant cells. In this study, we investigated the localization and the activity of P-gp in the caveolae of endothelial cells of the BBB. We used an in vitro model of the BBB which is formed by co-culture of bovine brain capillary endothelial cells (BBCEC) with astrocytes. Caveolar microdomains isolated from BBCEC are enriched in P-gp, cholesterol, caveolin-1, and caveolin-2. Moreover, P-gp interacts with caveolin-1 and caveolin-2; together, they form a high molecular mass complex. P-gp in isolated caveolae is able to bind its substrates, and the caveolae-disrupting agents filipin III and nystatin decrease P-gp transport activity. In addition, mutations in the caveolin-binding motif present in P-gp reduced the interaction of P-gp with caveolin-1 and increased the transport activity of P-gp. Thus, P-gp expressed at the BBB is mainly localized in caveolae and its activity may be modulated by interaction with caveolin-1.