Background: Membrane protrusions play important roles in biological processes such as cell adhesion, wound healing, migration, and sensing of the external environment. Cell protrusions are a subtype of membrane microdomains composed of cholesterol and sphingolipids, and can be disrupted by cholesterol depletion. Prominins are pentaspan membrane proteins that bind cholesterol and localize to plasma membrane (PM) protrusions. Prominin-1 is of great interest as a marker for stem and cancer cells, while Prominin-2 (Prom2) is reportedly restricted to epithelial cells. Aim: To characterize the effects of Prom-2 expression on PM microdomain organization. Methods: Prom2-fluorescent protein was transfected in human skin fibroblasts (HSF) and Chinese hamster ovary (CHO) cells for PM raft and endocytic studies. Caveolae at PM were visualized using transmission electron microscopy. Cdc42 activation was measured and caveolin-1 knockdown was performed using siRNAs. Results: Prom2 expression in HSF and CHO cells caused extensive Prom2-positive protrusions that co-localized with lipid raft markers. Prom2 expression significantly decreased caveolae at the PM, reduced caveolar endocytosis and increased caveolin-1 phosphorylation. Prom2 expression also inhibited Cdc42 dependent fluid phase endocytosis via decreased Cdc42 activation. Effects on endocytosis were reversed by addition of cholesterol. Knockdown of caveolin-1 by siRNA restored Cdc42 dependent fluid phase endocytosis in Prom2-expressing cells. Conclusions: Prom2 protrusions primarily localize to lipid rafts and recruit cholesterol into protrusions and away from caveolae, leading to increased phosphorylation of caveolin-1, which inhibits Cdc42-dependent endocytosis. This study provides a new insight for the role for prominins in the regulation of PM lipid organization. Published by Elsevier Inc.