The LDL receptor (LDL-R) promotes the specific endocytosis and lysosomal delivery of extracellular lipoprotein ligands via clathrin-coated pits. It was widely assumed that other closely related members of the LDL-R gene family would have similar functions, but recent experimental evidence has revealed that one such protein, apolipoprotein E receptor 2 (apoER2), has a critical role as an "outside-in" signal transducer in the brain. ApoER2 signaling appears to require interaction between its cytoplasmic domain and adapter molecules such as Dab1, JIP 1 and JIP 2, and PSD-95. Many of the receptors for other signaling pathways affected by such adapter molecules are compartmentalized into specialized microdomains within the plasma membrane termed caveolae. Here, we show that apoER2, but not LDL-R, is localized to caveolae, supporting the concept that its physiological role is in cell signaling, rather than in endocytosing ligands.