Integrin α1β1 is a collagen receptor that down-regulates collagen and reactive oxygen species (ROS) production, and mice lacking this receptor show increased ROS levels and exacerbated glomerular sclerosis following injury. Caveolin-1 (Cav-1) is a multifunctional protein that is tyrosine-phosphorylated in response to injury and has been implicated in ROS-mediated injury. Cav-1 interacts with integrins, and integrin α1β1 binds/activates T cell protein-tyrosine phosphatase (TCPTP), which is homologous to the tyrosine phosphatase PTP1B known to dephosphorylate Cav-1. In this study, we analyzed whether phosphorylated Cav-1 (pCav-1) is a substrate of TCPTP and if integrin α1β1 is essential for promoting TCPTP-mediated Cav-1 dephosphorylation. We found that Cav-1 phosphorylation is significantly higher in cells lacking integrin α1β1 at base line and following oxidative stress. Overexpression of TCPTP leads to reduced pCav-1 levels only in cells expressing integrin α1β1. Using solid phase binding assays, we demonstrated that 1) purified Cav-1 directly interacts with TCPTP and the integrin α1 subunit, 2) pCav-1 is a substrate of TCPTP, and 3) TCPTP-mediated Cav-1 dephosphorylation is highly increased by the addition of purified integrin α1β1 or an integrin α1 cytoplasmic peptide to which TCPTP has been shown to bind. Thus, our results demonstrate that pCav-1 is a new substrate of TCPTP and that integrin α1β1 acts as a negative regulator of Cav-1 phosphorylation by activating TCPTP. This could explain the protective function of integrin α1β1 in oxidative stress-mediated damage and why integrin α1-null mice are more susceptible to fibrosis following injury.