Idiopathic pulmonary fibrosis is associated with a decreased expression of caveolin-1 (cav-1), yet its role remains unclear. To investigate the role of cav-1, we induced pulmonary fibrosis in wild-type (WT) and cav-1–deficient (cav-1^−/−) mice using intratracheal instillation of bleomycin. Contrary to expectations, significantly less collagen deposition was measured in tissue from cav-1^−/− mice than in their WT counterparts, consistent with reduced mRNA expression of procollagen1a2 and procollagen3a1. Moreover, cav-1^−/− mice demonstrated 77% less α-smooth muscle actin staining, suggesting reduced mesenchymal cell activation. Levels of pulmonary injury, assessed by tenascin-C mRNA expression and CD44v10 detection, were significantly increased at Day 21 after injury in WT mice, an effect significantly attenuated in cav-1^−/− mice. The apparent protective effect against bleomycin-induced fibrosis in cav-1^−/− mice was attributed to reduce cellular senescence and apoptosis in cav-1^−/− epithelial cells during the early phase of lung injury. Reduced matrix metalloproteinase (MMP)-2 and MMP-9 expressions indicated a low profile of senescence-associated secretory phenotype (SASP) in the bleomycin-injured cav-1^−/− mice. However, IL-6 and macrophage inflammatory protein 2 were increased in WT and cav-1^−/− mice after bleomycin challenge, suggesting that bleomycin-induced inflammatory response substantiated the SASP pool. Thus, loss of cav-1 attenuates early injury response to bleomycin by limiting stress-induced cellular senescence/apoptosis in epithelial cells. In contrast, decreased cav-1 expression promotes fibroblast activation and collagen deposition, effects that may be relevant in later stages of reparative response. Hence, therapeutic strategies to modulate the expression of cav-1 should take into account cell-specific effects in the regenerative responses of the lung epithelium to injury.