In cardiac myocytes, agonist binding to muscarinic acetylcholine receptors (mAchRs) leads to the targeting of stimulated receptors to plasmalemmal microdomains termed caveolae. Here, we examined whether this translocation leads to mAchR internalization and alteration in downstream NO signaling. Differential binding of membrane-permeant and -impermeant mAchR radioligands on caveolae-enriched membranes revealed that carbachol stimulation of cardiac myocytes induces sequestration of mAchRs through caveolae fission. GTP but not its non-hydrolyzable analog GTP gamma S drove the further detachment of caveolae from myocyte sarcolemma. Also, incubation of extracts of carbachol-stimulated myocytes with recombinant GTPase dynamin induced mAchR sequestration in budded caveolae, while dominant-negative K44A dynamin inhibited it. These data were confirmed by immunofluorescence microscopy on m2 mAchR-expressing COS cells. Finally, repeated carbachol stimulations of mAchRs co-expressed in COS cells with endothelial nitric oxide synthase (eNOS) and wild-type, but not mutant, dynamin led to a progressive increase in mAchR sequestration and a concurrent stabilization of the inhibitory eNOS-caveolin complex. These findings emphasize the role of caveolae in mAchR trafficking and NO signaling, and suggest that caveolae fission may contribute to G-protein-coupled receptor desensitization.