In addition to providing structural support, caveolin-1 (Cav1), a component of lipid rafts, including caveolae, in the plasma membrane, is involved in various cellular mechanisms, including signal transduction. Although pre-synaptic membrane dynamics and trafficking are essential cellular processes during synaptic vesicle exocytosis/synaptic transmission and synaptic vesicle endocytosis/synaptic retrieval, little is known about the involvement of Cav1 in synaptic vesicle dynamics. Here we demonstrate that synaptic vesicle exocytosis is significantly impaired in Cav1–knockdown (Cav1–KD) neurons. Specifically, the size of the synaptic recycled vesicle pool is modestly decreased in Cav1–KD synapses and the kinetics of synaptic vesicle endocytosis are somewhat slowed. Notably, neurons rescued by triple mutants of Cav1 lacking palmitoylation sites mutants show impairments in both synaptic transmission and retrieval. Collectively, our findings implicate Cav1 in activity-driven synaptic vesicle dynamics—both exocytosis and endocytosis—and demonstrate that palmitoylation of Cav1 is important for this activity.