Multidrug resistance (MDR) is a multifactorial process that involves elevated expression of drug transporters as well as additional biochemical changes that contribute to the drug resistant phenotype. Here we review recent results indicating the upregulation of constituents of rafts and caveolae, including glucosylceramide, cholesterol and caveolin-1, in MDR cells. Accordingly, the number of plasma membrane caveolae is greatly increased in MDR cells. The relationship between caveolin and MDR may be linked to the function of caveolin-1 in mediating cholesterol efflux, a pathway that we hypothesized to facilitate the delivery of drugs from intracellular compartments to plasma membrane resident drug transporters. An additional link seems to exist between the upregulation of GlcCer synthase and attenuation of ceramide-mediated apoptotic signaling. These adaptations may promote cell survival during chemotherapy and, hence, would be positively selected during cell exposure to cytotoxic drugs. However, the overexpression of caveolin-1, an oncosuppressive protein, may also reverse or attenuate important aspects of the phenotypic transformation of MDR cells. The molecular mechanisms by which caveolin-1 exerts its effects on cell proliferation, cell survival, and multidrug resistance remain to be fully elucidated.