VIP21-caveolin is one of the components which form the cytoplasmic surface of caveolae, In vivo, this integral membrane protein is found in homo-oligomers with molecular masses of approximately 200, 400 and 600 kDa, These oligomers are also formed by the addition of cytosol to the in vitro synthesized and membrane inserted VIP21-caveolin, Here we show that long chain fatty acyl coenzyme A esters can completely substitute for cytosol in inducing 200 kDa and 400 kDa complexes, whereas 25-hydroxy-cholesterol can produce the 200 kDa oligomer. In order to understand whether acylation of VIP21-caveolin itself is a Prerequisite for oligomerization, we studied a mutant protein lacking all three cysteines, When analyzed by velocity sucrose gradient centrifugation in the presence of the non-ionic detergent octylglucoside, both palmitoylated and non-palmitoylated VIP21-caveolin formed oligomers that were indistinguishable. However, only the oligomers of the non-palmitoylated protein are disrupted when analyzed by SDS-PAGE without boiling, These data suggest that the protein domains of VIP21-caveolin are the primary determinants of oligomerization, but that palmitoylation of cysteine residues can increase the stability of the oligomers.