Airway smooth muscle (ASM) cells exhibit phenotype plasticity that is under control of external stimuli such as growth factors and the extracellular matrix, and is regulated by a network of intracellular signaling cascades that control transcription and protein translation of phenotype-specific genes. Phenotype plasticity underpins the ability of airway myocytes to contribute both to acute bronchospasm, and to the features of airway remodeling in chronic asthma. A feature of mature, contractile ASM cells is the presence of abundant caveolae, omega-shaped plasma membrane invaginations that develop from the association of lipid rafts with caveolin-1, a unique protein with structural and functional properties. Caveolae and caveolin-1 modulate signaling from receptors for growth factors and contractile agonists, and thus may modulate functional diversity of myocytes. Caveolin-1 appears to play a suppressive role in ASM cell proliferation, and orchestrates receptor-mediated signal transduction that regulates phenotype expression of ASM cells. Interestingly, in contractile myocytes caveolae are organized in close proximity to intracellular Ca2+-handling organelles, and are partitioned into discrete linear domains aligned with beta-dystroglycan, a subunit of the actin-tethered dystrophin glycoprotein complex (DGC). Despite development of transgenic models to investigate caveolin biology, only superficial understanding of the role of these proteins in ASM phenotype expression and modulation of the functional responses of myocytes of a particular phenotype is available. This review summarizes mechanisms regulating ASM cell phenotype plasticity, and the role of caveolae as determinants of the functional diversity of ASM cells of a particular phenotypic state.