Synthesis of nitric oxide (NO) by endothelial nitric oxide synthase (eNOS) is critical for normal vascular homeostasis. eNOS function is rapidly regulated by agonists and blood flow and chronically by factors that regulate mRNA stability and gene transcription. Recently, localization of eNOS to specialized plasma membrane invaginations termed caveolae has been proposed to be required for maximal eNOS activity. Because caveolae are highly enriched in cholesterol, and hypercholesterolemia is associated with increased NO production, we first studied the effects of cholesterol loading on eNOS localization and NO production in cultured bovine aortic endothelial cells (BAECs). Caveolae-enriched fractions were prepared by OptiPrep gradient density centrifugation. Treatment of BAECs with 30 microgram/mL cholesterol for 24 hours stimulated significant increases in total eNOS protein expression (1.50-fold), eNOS associated with caveolae-enriched membranes (2.23-fold), and calcium ionophore-stimulated NO production (1.56-fold). Because reactive oxygen species (ROS) contribute to endothelial dysfunction in hypercholesterolemia, we next studied the effects of ROS on eNOS localization and caveolae number. Treatment of BAECs for 24 hours with 1 micromol/L LY83583, a superoxide-generating napthoquinolinedione, decreased caveolae number measured by electron microscopy and prevented the cholesterol-mediated increases in eNOS expression. In vitro exposure of caveolae-enriched membranes to ROS (xanthine plus xanthine oxidase) dissociated caveolin more readily than eNOS from the membranes. These results show that cholesterol treatment increases eNOS expression, whereas ROS treatment decreases eNOS expression and the association of eNOS with caveolin in caveolae-enriched membranes. Our data suggest that oxidative stress modulates endothelial function by regulating caveolae formation, eNOS expression, and eNOS-caveolin interactions.