The endogenous Ca2+-inhibitable adenylyl cyclase type VI of C6-2B glioma cells is regulated only by capacitative Ca2+ entry and not by a substantial elevation of [Ca2+](i) from either intracellular stores or via ionophore-mediated Ca2+ entry (Chiono, M., Mahey, R,, Tate, G,, and Cooper, D. M, F. (1995) J. Biol. Chem. 270, 1149-1155; Fagan, K, A., Mons, N., and Cooper, D, M. F, (1998) J, Biol. Chem, 273, 9297-9305), The present studies explored the role of cholesterol-rich domains in maintaining this functional association. The cholesterol-binding agent, filipin, profoundly inhibited adenylyl cyclase activity, Depletion of plasma membrane cholesterol with methyl-beta-cyclodextrin did not affect forskolin-stimulated adenylyl cyclase activity and did not affect capacitative Ca2+ entry, However, cholesterol depletion completely ablated the regulation of adenylyl cyclase by capacitative Ca2+ entry. Repletion of cholesterol restored the sensitivity of adenylyl cyclase to capacitative Ca2+ entry. Adenylyl cyclase catalytic activity and immunoreactivity were extracted into buoyant caveolar fractions with Triton X-100, The presence of adenylyl cyclase in such structures was eliminated by depletion of plasma membrane cholesterol, Altogether, these data lead us to conclude that adenylyl cyclase must occur in cholesterol-rich domains to be susceptible to regulation by capacitative Ca2+ entry. These findings are the first indication of regulatory significance for the localization of adenylyl cyclase in caveolae.