Caveolin-1 present in immune cells may be involved in regulation of the inflammatory response. Here using caveolin-1 null (Cav-1^-/-) mice, we addressed the role of caveolin-1 in polymorphonuclear neutrophils (PMN) in regulating PMN activation-mediated lung injury. In lungs of wild-type (Cav-1^+/+) mice perfused at constant flow with Krebs-Henseleit solution, addition of Cav-1^+/+ PMNs (4 x 10⁶ cells) into the perfusate followed by their activation with formyl-Met-Leu-Phe (fMLP, 1.0 µM) plus platelet activating factor (PAF, 1.0 nM) increased pulmonary microvessel filtration coefficient by 150% and wet/dry lung weight ratio by 50% as well as PMN accumulation in lungs. These responses were markedly reduced in lungs perfused with Cav-1^-/- PMNs followed by addition of the same activating agents. fMLP-stimulated adhesion of Cav-1^-/- PMNs to pulmonary microvascular endothelial cells and migration of Cav-1^-/- PMNs across endothelial monolayers were also impaired compared to Cav-1^+/+ PMNs. Cav-1^-/- PMNs showed 50-80% reduction in PMA- or fMLP-stimulated superoxide production compared to Cav-1^+/+ PMNs. In addition, Cav-1^-/- PMNs had decreased migratory activity (50%) and adhesion to fibrinogen (40%) in response to fMLP. Rac1 and Rac2 were activated in Cav-1^+/+ PMNs after stimulation of fMLP, but not in Cav-1^-/- PMNs. Exogenous expression of caveolin-1 in COS-phox cells augmented the fMLP-induced Rac1 activation and superoxide production indicating a direct role of caveolin-1 in the mechanism of superoxide production. Thus, caveolin-1 expression in PMNs plays a key role in mediating PMN activation, adhesion, and transendothelial migration and in PMN activation-induced lung inflammation and vascular injury.