Caveolae are flask-shaped invaginations in the membrane that depend on the contents of cholesterol and on the structural protein caveolin. The organisation of caveolae in parallel strands between dense bands in smooth muscle is arguably unique. It is increasingly recognised, bolstered in large part by recent studies in caveolae deficient animals, that caveolae sequester and regulate a variety of signalling intermediaries. The role of caveolae in smooth muscle signal transduction, as inferred from studies on transgenic animals and in vitro approaches, is the topic of the current review. Both G-protein coupled receptors and tyrosine kinase receptors are believed to cluster in caveolae, and the exciting possibility that caveolae provide a platform for interactions between the sarcoplasmic reticulum and plasmalemmal ion channels is emerging. Moreover, messengers involved in Ca2+ sensitization of myosin phosphorylation and contraction may depend on caveolae or caveolin. Caveolae thus appear to constitute an important signalling domain that plays a role not only in regulation of smooth muscle tone, but also in proliferation, such as seen in neointima formation and atherosclerosis.