Caveolae are flask-shaped micro-invaginations associated with the plasma membrane of a wide variety of cell types. Caveolin, an integral membrane component of caveolae, was first identified as the major phosphoprotein whose phosphorylation was elevated in v-Src transformed cells. As both v-Src transformation and elevated caveolin phosphorylation were dependent on membrane attachment of v-Src, it has been suggested that caveolin is a critical target in v-Src transformation. Although an increase in tyrosine phosphorylation of caveolin was evident, the increase in caveolin phosphorylation was predominantly on serine residues. In accordance with these in vivo observations, isolated caveolin-rich membrane domains undergo phosphorylation in vitro predominantly on serine and contain an unidentified serine kinase activity. Here, we have identified this serine kinase activity as a casein kinase II-like enzyme, since the phosphorylation of caveolin-rich membrane domains is stimulated and inhibited by known effectors of casein kinase II (poly-L-lysine, endogenous polyamines, and a casein kinase II inhibitor peptide), but is unaffected by modulators of other known kinases. In support of these observations, caveolin contains a consensus sequence for casein kinase II phosphorylation in its cytoplasmic N-terminal domain (Ser-88). A peptide containing this sequence inhibits the in vitro phosphorylation of caveolin-rich membrane domains, while many other peptides derived from the N-terminal domain of caveolin do not affect phosphorylation. Caveolin-rich membrane domains were also a substrate for exogenously added purified casein kinase II, but not casein kinase I. Finally, immunoblotting of these domains with an antibody directed against the alpha and alpha' subunits of casein kinase II reveals two bands with apparent molecular weights consistent with the known molecular weights of the alpha and alpha' subunits of casein kinase II. As casein kinase II appears to play a role in mitogenic signalling events and casein kinase II activators (endogenous polyamines) are required for v-Src transformation, our results may have implications for understanding the mechanism of v-Src oncogenesis.