Anchorage-independent growth (AIG) of cancer cells requires escape from integrin-mediated signals. A protein frequently downregulated in cancer, caveolin-1 (Cav1), mediates integrin control of several growth-regulatory pathways. We report that loss of Cav1 results in faster exit from quiescence and progress through the cell cycle, proliferation without anchorage to substrate, and absence of cyclin D1 downregulation upon serum deprivation or detachment. Surprisingly, this proliferative advantage is independent of Erk-mitogen-activated protein kinase signaling; instead, cyclin expression and cell cycle progression in the absence of Cav1 are driven by increased membrane order and Rac targeting. AIG was induced in Cav1-expressing cells by forced membrane targeting of Rac1 or by inhibiting Cav1-mediated internalization of plasma membrane ordered domains at which Rac1 accumulates. Restoring Rho activity, which is downregulated after loss of Cav1, antagonizes Rac1 and prevents cyclin D1 accumulation after serum starvation or loss of adhesion. Anchorage independence and increased proliferation in Cav1-deficient tumoral and null cells are thus due to an increased fraction of active Rac1 at membrane ordered domains. These results provide insight into the mechanisms regulating growth of cancer cells, which frequently lose Cav1 function.