We have utilized small interfering RNA (siRNA)-mediated depletion of the beta-COP subunit of COP-I to explore COP-I function in organellar compartmentalization and protein traffic. Reduction in beta-COP levels causes the colocalization of markers for the endoplasmic reticulum (ER)-Golgi intermediate compartment (ERGIC), Golgi, trans-Golgi network (TGN), and recycling endosomes in large, globular compartments. The lack of spatial differentiation of these compartments is not due to a general collapse of all cellular organelles since markers for the early endosomes and lysosomes do not redistribute to the common structures. Anterograde trafficking of the transmembrane cargo vesicular stomatitis virus membrane glycoprotein and of a subset of soluble cargoes is arrested within the common globular compartments. Similarly, recycling traffic of transferrin through the common compartment is perturbed. Furthermore, the trafficking of caveolin-1 (Cav1), a structural protein of caveolae, is arrested within the globular structures. Importantly, Cav1 coprecipitates with the gamma-subunit of COP-I, suggesting that Cav1 is a COP-I cargo. Our findings suggest that COP-I is required for the compartmentalization of the ERGIC, Golgi, TGN, and recycling endosomes and that COP-I plays a novel role in the biosynthetic transport of Cav1.