Caveolin-3 is the principal structural protein of caveolae in striated muscle. Autosomal dominant limb-girdle muscular dystrophy (LGMD-1C) in humans is due to mutations (DeltaTFT and Pro --> Leu) within the CAV3 gene. We have shown that LGMD-1C mutations lead to formation of unstable aggregates of caveolin-3 that are retained intracellularly and are rapidly degraded. The mechanism by which LGMD-1C mutants of caveolin-3 are degraded remains unknown. Here, we show that LGMD-1C mutants of caveolin-3 undergo ubiquitination-proteasomal degradation. Treatment with proteasomal inhibitors (MG-132, MG-115, lactacystin, or proteasome inhibitor I), but not lysosomal inhibitors, prevented degradation of LGMD-1C caveolin-3 mutants. In the presence of MG-132, LGMD-1C caveolin-3 mutants accumulated within the endoplasmic reticulum and did not reach the plasma membrane. LGMD-1C mutants of caveolin-3 behave in a dominant negative fashion, causing intracellular retention and degradation of wild-type caveolin-3. Interestingly, in cells co-expressing wild-type and mutant forms of caveolin-3, MG-132 treatment rescued wild-type caveolin-3; wild-type caveolin-3 was not degraded and reached the plasma membrane. These results may have clinical implications for treatment of patients with LGMD-1C.