Increased brain expression of vascular endothelial growth factor (VEGF) is associated with neurological disease, brain injury, and blood-brain barrier (BBB) dysfunction. However, the specific effect of VEGF on the efflux transporter P-glycoprotein, a critical component of the BBB, is not known. Using isolated rat brain capillaries and in situ rat brain perfusion, we determined the effect of VEGF exposure on P-glycoprotein activity in vitro and in vivo. In isolated capillaries, VEGF acutely and reversibly decreased P-glycoprotein transport activity without decreasing transporter protein expression or opening tight junctions. This effect was blocked by inhibitors of the VEGF receptor flk-1 and Src kinase, but not by inhibitors of phosphatidylinositol-3-kinase or protein kinase C. VEGF also increased Tyr-14 phosphorylation of caveolin-1, and this was blocked by the Src inhibitor PP2. Pharmacological activation of Src kinase activity mimicked the effects of VEGF on P-glycoprotein activity and Tyr-14 phosphorylation of caveolin-1. In vivo, intracerebroventricular injection of VEGF increased brain distribution of P-glycoprotein substrates morphine and verapamil, but not the tight junction marker, sucrose; this effect was blocked by PP2. These findings indicate that VEGF decreases P-glycoprotein activity via activation of flk-1 and Src, and suggest Src-mediated phosphorylation of caveolin-1 may play a role in downregulation of P-glycoprotein activity. These findings also imply that P-glycoprotein activity is acutely diminished in pathological conditions associated with increased brain VEGF expression and that BBB VEGF/Src signaling could be targeted to acutely modulate P-glycoprotein activity and thus improve brain drug delivery.