The P2X7 receptor has recently been described as a marker for lung alveolar epithelial type I cells. Here, we demonstrate both the expression of P2X7 protein and its partition into lipid rafts in the mouse lung alveolar epithelial cell line E10. A significant degree of colocalization was observed between P2X7 and the raft marker protein Caveolin-1; also, P2X7 protein was associated with caveolae. A marked reduction in P2X7 immunoreactivity was observed in lung sections prepared from Caveolin-1-knockout mice, indicating that Caveolin-1 expression was required for full expression of P2X7 protein. Indeed, suppression of Caveolin-1 protein expression in E10 cells using short hairpin RNAs resulted in a large reduction in P2X7 protein expression. Our data demonstrate a potential interaction between P2X7 protein and Caveolin-1 in lipid rafts, and provide a basis for further functional and biochemical studies to probe the physiologic significance of this interaction.