The human ether-a-go-go-related gene (hERG) encodes the rapidly activating delayed rectifier potassium channel (I(Kr)) which plays an important role in cardiac repolarization. A reduction or increase in hERG current can cause long or short QT syndrome, respectively, leading to fatal cardiac arrhythmias. The channel density in the plasma membrane is a key determinant of the whole cell current amplitude. To gain insight into the molecular mechanisms for the regulation of hERG density at the plasma membrane, we used whole cell voltage clamp, Western blotting, and immunocytochemical methods to investigate the effects of an integral membrane protein, caveolin-3 (Cav3) on hERG expression levels. Our data demonstrate that Cav3, hERG, and ubiquitin-ligase Nedd4-2 interact with each other and form a complex. Expression of Cav3 thus enhances the hERG-Nedd4-2 interaction, leading to an increased ubiquitination and degradation of mature, plasma-membrane localized hERG channels. Disrupting Nedd4-2 interaction with hERG by mutations eliminates the effects of Cav3 on hERG channels. Knockdown of endogenous Cav3 or Nedd4-2 in cultured neonatal rat ventricular myocytes using siRNA led to an increase in native I(Kr). Our data demonstrate that hERG expression in the plasma membrane is regulated by Cav3 via Nedd4-2. These findings extend our understanding of the regulation of hERG channels and cardiac electrophysiology.