We recently reported that the activation of H-Ras represents one of the signaling steps underlying the interleukin-1beta (IL-1beta)-mediated metabolic dysfunction of the islet beta-cell. In the present study, we examined potential contributory roles of membrane-associated, cholesterol-enriched lipid rafts/caveolae and their constituent proteins (e.g., caveolin-1 [Cav-1]) as potential sites for IL-1beta-induced nitric oxide (NO) release in the isolated beta-cell. Disruption of lipid rafts (e.g., with cyclodextrin) markedly reduced IL-1beta-induced gene expression of inducible NO synthase (iNOS) and NO release from beta-cells. Immunologic and confocal microscopic evidence also suggested a transient but significant stimulation of tyrosine phosphorylation of Cav-1 in beta-cells briefly (for 15 min) exposed to IL-1beta that was markedly attenuated by three structurally distinct inhibitors of protein tyrosine phosphorylation. Overexpression of an inactive mutant of Cav-1 lacking the tyrosine phosphorylation site (Y14F) or an siRNA-mediated Cav-1 knock down also resulted in marked attenuation of IL-1beta-induced iNOS gene expression and NO release from these cells, thus further implicating Cav-1 in this signaling cascade. IL-1beta treatment also increased (within 20 min) the translocation of H-Ras into lipid rafts. Here we provide the first evidence to suggest that tyrosine phosphorylation of Cav-1 and subsequent interaction among members of the Ras signaling pathway within the membrane lipid microdomains represent early signaling mechanisms of IL-1beta in beta-cells.