Vascular smooth muscle cells shift between two major differentiated states with distinct morphological and functional properties, a contractile and a synthetic phenotype. Here, primary cultures were used to study caveolae expression and dynamics in these cells. The results demonstrate that caveolae are more numerous and more actively interact with intracellular organelles in contractile than in synthetic cells. Immunohistochemistry showed that caveolin-1 was mainly localized to caveolae in contractile cells and partly shifted to Golgi-associated vesicles in synthetic cells, whereas caveolin-2 chiefly appeared in cytoplasmic vesicles in both cases. Cholera toxin B subunit, a ligand of GM1 ganglioside, was internalized via caveolae and carried to endosomes and Golgi-associated vesicles. In contractile cells, it later moved into Golgi and endoplasmic reticulum (ER) cisternae and thus had access to the entire endocytic and exocytic pathways. In contrast, in synthetic cells, the tracer was restricted to the endocytic pathway. Filipin staining similarly disclosed that cholesterol was more widely distributed in contractile than in synthetic cells, with strong labeling of both caveolae and adjacent ER portions. Although no direct continuity between caveolae and ER was detected, it is suggested that cholesterol and other molecules may be translocated between these compartments. The observed differences in caveolae expression and dynamics are likely to be significant for the differences in proliferative capacity and cholesterol transport between contractile and synthetic smooth muscle cells.