Purpose: To determine whether caveolin-1 (i) prevents epithelial-mesenchymal transition in the RPE and laser-induced subretinal fibrosis and (ii) promotes or inhibits cellular senescence in the RPE. Methods: We examined laser-induced subretinal fibrosis and RPE cell contraction in wild-type and Caveolin-1 knockout (Cav-1-/-) mice treated with or without cavtratin, a cell-permeable peptide of caveolin-1. The senescence marker p16INK4a was measured in RPE tissues from patients with geographic atrophy and aged mice, laser-induced subretinal fibrosis, and primary human RPE cells. Human RPE was examined by TUNEL staining, reactive oxygen species generation, cell viability, and senescence-associated β-galactosidase staining. Results: The volume of subretinal fibrosis was significantly smaller in cavtratin-injected eyes from wild-type mice than in control eyes from wild-type, P = 0.0062, and Cav-1-/- mice, P = 0.0095. Cavtratin treatment produced significant improvements in primary RPE cell contraction in wild-type, P = 0.04, and Cav-1-/- mice, P = 0.01. p16INK4a expression in the RPE was higher in patients with than without geographic atrophy. p16INK4a was expressed in 18-month-old but not 2-month-old wild-type mouse eyes. p16INK4a and collagen type I antibodies showed co-localization in subretinal fibrosis. Cavtratin did not affect RPE cell apoptosis or reactive oxygen species generation, but decreased cell viability and increased senescence-associated β-galactosidase-positive cells. Conclusions: Enhanced expression of caveolin-1 successfully blocked epithelial-mesenchymal transition of RPE and the reduction of subretinal fibrosis in mice. Nevertheless, in exchange for blocking subretinal fibrosis, caveolin-1 promotes RPE cellular senescence and might affect the progression of geographic atrophy in AMD.