Autophagy plays a pivotal role in cellular homeostasis and adaptation to adverse environments, though the regulation of this process remains incompletely understood. We have recently observed that caveolin-1 (Cav-1), a major constituent of lipid rafts on plasma membrane, can regulate autophagy in cigarette smoking-induced injury of lung epithelium, whereas the underlying molecular mechanisms remain incompletely understood. In the present study we found that Cav-1 interacted with and regulated the expression of ATG12-ATG5, an ubiquitin-like conjugation system crucial for autophagosome formation, in lung epithelial Beas-2B cells. Deletion of Cav-1 increased basal and starvation-induced levels of ATG12-ATG5 and autophagy. Biochemical analyses revealed that Cav-1 interacted with ATG5, ATG12, and their active complex ATG12-ATG5. Overexpression of ATG5 or ATG12 increased their interactions with Cav-1, the formation of ATG12-ATG5 conjugate, and the subsequent basal levels of autophagy, but resulted in decreased interactions between Cav-1 and another molecule. Knockdown of ATG12 enhanced the ATG5-Cav-1 interaction. Mutation of the Cav-1 binding motif on ATG12 disrupted their interaction and further augmented autophagy. Cav-1 also regulated the expression of ATG16L, another autophagy protein associating with the ATG12-ATG5 conjugate during autophagosome formation. Altogether these studies clearly demonstrate that Cav-1 competitively interacts with the ATG12-ATG5 system to suppress the formation and function of the latter in lung epithelial cells, thereby providing new insights into the molecular mechanisms by which Cav-1 regulates autophagy, and suggesting the important function of Cav-1 in certain lung diseases via regulation of autophagy homeostasis.