The cell plasma membrane contains specialized microdomains called lipid rafts which contain high amounts of sphingolipids and cholesterol. Lipid rafts are involved in a number of membrane protein functions. The urea transporter UT-A1, located in the kidney inner medullary collecting duct, is important for urine concentrating ability. In this study, we investigated the possible role of lipid rafts in UT-A1 membrane regulation. Using sucrose gradient cell fractionation we demonstrated that UT-A1 is concentrated in the caveolae-rich fraction both in stably expressing UT-A1 HEK293 cells and in freshly isolated kidney IMCD suspensions. In these gradients, UT-A1 at the cell plasma membrane is co-distributed with caveolin-1, a major component of caveolae. The co-localization of UT-A1 in lipid rafts/caveolae was further confirmed in isolated caveolae from UT-A1-HEK293 cells. The direct association of UT-A1 and caveolin-1 was identified by immunoprecipitation and GST pull-down assay. Examination of internalized UT-A1 in pEGFP-UT-A1 transfected HEK293 cells fluorescent overlap with labeled cholera toxin subunit B (CTB), a marker of the caveolae-mediated endocytosis pathway. Disruption of lipid rafts by methyl--cyclodextrin (MCD) or knocking down caveolin-1 by small interference RNA resulted in UT-A1 cell membrane accumulation. Functionally, overexpression of caveolin-1 in oocytes decreased UT-A1 urea transport activity and UT-A1 cell surface expression. Our results indicate that lipid rafts/caveolae participate in UT-A1 membrane regulation and this effect is mediated via a direct interaction of caveolin-1 with UT-A1.