Caveolae are flask or w-shaped cell membrane invaginations of cholesterol-rich cell surface microdomains that have been implicated in assembling many signaling molecules and facilitating and integrating their functions. Caveolae may also play an important role in sequestering inactive signaling molecules and down-regulating receptor activities, Additionally, caveolae may provide an environment for the regulated activation of these molecules and explain the cross-talk between different signaling pathways. Caveolae have been the object of intense research since the discovery of a biochemical marker protein, caveolin, in the early 1990s., Currently, the caveolin gene family includes caveolin 1, caveolin 2, and caveolin 3. They are highly homologous but different in their tissue distribution and probably their physiologic roles in signal transduction. In the lung, caveolae are present in the endothelial cells, smooth-muscle cells, fibroblasts, and type 1 pneumo-cytes. Caveolin 1 constitutes the main structural protein of caveolae. Caveolin 2 is co-expressed and hetero-oligomerizes with caveolin 2. A region has been defined within caveolin that mediates its interaction with other proteins. This protein domain is termed the caveolin-scaffolding domain Lipid rafts are lipid microenvironments on the cell surface and, like caveolae, are thought to be rich in cholesterol and sphingolipids; however, they are flat and do not contain caveolin. These lipid rafts may represent precursors of caveolae and facilitate the cholesterol-dependent insertion of caveolins into membranes. Therefore, most researchers now believe that caveolae are a subset of lipid rafts, formed by the acquisition of caveolin. Since caveolin interactions with signaling molecules lead to altered cell signaling, and because caveolin-1 expression is lost or reduced during cell transformation by activated oncogenes as well as in several mammary carcinoma cell lines, it has been suggested that caveolin may possess tumor suppressor activity. Of importance, knockout mice deficient in caveolin 1, although fertile, show severe abnormalities in their lungs characterized by thick alveolar walls and hyperproliferation of angio-blastic cells, indicating strongly that caveolin plays a role in the control of proper lung vascular develop-ment, and in lung endothelial cell biology. Caveo-lin 2-deficient mice have lung phenotypes identical to those reported in caveolin 1-deficient mice.