Both after vascular injury and when established in vitro, arterial smooth muscle cells pass through a characteristic change in phenotype. This process includes a prominent structural reorganization with partial loss of myofilaments and formation of a large endoplasmic reticulum and Golgi complex. As a result, the cells lose their contractility and become able instead to divide and to secrete extracellular matrix components. In the present study, the expression of plasma membrane caveolae in rat arterial smooth muscle cells was studied in primary culture and during the formation of neointimal thickenings after balloon injury. Electron microscopic analysis revealed that the number of caveolae (identified as flask-shaped invaginations of the plasma membrane) was reduced when the cells converted from a contractile to a synthetic phenotype (as defined morphologically) and then increased again when they readopted a more differentiated state. However, immunoblotting analysis did not show any changes in the cellular content of caveolin (a major protein component of caveolae) during the 1st week in culture. At the same time, immunocytochemical staining demonstrated a shift in the localization of caveolin from small spot-like structures dispersed over the cell surface to vesicular structures in the perinuclear cytoplasm. These findings indicate that the transition of smooth muscle cells from a contractile to a synthetic phenotype involves a marked decline in the number of plasma membrane caveolae. In parallel, caveolin is internalized and redistributed to Golgi-associated vesicles in the perinuclear cytoplasm. In context of the rapidly increasing awareness of the importance of caveolae both in signal transduction and intracellular cholesterol transport, it seems likely that the variations in the number of caveolae may be significant for the functional differences between smooth muscle cells in different phenotypes.