Caveolae, flask-shaped invaginations of the plasma membrane, are particularly abundant in muscle cells. We have recently cloned a muscle-specific caveolin, termed caveolin-3, which is expressed in differentiated muscle cells. Specific antibodies to caveolin-3 were generated and used to characterize the distribution of caveolin-3 in adult and differentiating muscle. In fully differentiated skeletal muscle, caveolin-3 was shown to be associated exclusively with sarcolemmal caveolae. Localization of caveolin-3 during differentiation of primary cultured muscle cells and development of mouse skeletal muscle in vivo suggested that caveolin-3 is transiently associated with an internal membrane system. These elements were identified as developing transverse-(T)-tubules by double-labeling with antibodies to the alpha 1 subunit of the dihydropyridine receptor in C2C12 cells. Ultrastructural analysis of the caveolin-3-labeled elements showed an association of caveolin-3 with elaborate networks of interconnected caveolae, which penetrated the depths of the muscle fibers. These elements, which formed regular reticular structures, were shown to be surface-connected by labeling with cholera toxin conjugates. The results suggest that caveolin-3 transiently associates with T-tubules during development and may be involved in the early development of the T-tubule system in muscle.