The mechanisms underlying ureteral cell regulation are largely unknown. Previous studies have identified lipid rafts/caveolae as regulators of growth stimulatory signals in ureteral smooth muscle cells (USMCs). In this study we determined whether growth inhibitory signaling by transforming growth factor-β1 (TGF-β1) is also regulated by caveolae in USMC. Expression of components of the TGF-β1 signaling axis in USMCs was determined by immunoblot and mRNA analyses. Growth regulatory activity of TGF-β1 was assessed by 3 H-thymidine incorporation. In select experiments caveolae were disrupted reversibly by cholesterol depletion and replenishment prior to TGF-β1 treatment. TGF-β1-responsive gene expression was evaluated using the TGF-β1 responsive promoter-reporter construct 3TP-Lux. USMCs expressed TGF-β1, types I and II TGF-β1 receptors, and the effector Smad-2. TGF-β1 potently inhibited DNA synthesis in USMCs (IC 50 60 pM). TGF-β1 mediated DNA synthesis inhibition was potentiated following the disruption of caveolae by cholesterol depletion. This effect was reversible with membrane cholesterol restoration. TGF-β1 stimulated gene activity was augmented by caveolae disruption, while caveolae reformation returned promoter activity to baseline levels. TGF-β1 is a potent growth inhibitor of USMCs and its activity can be enhanced by caveolae ablation. These findings suggest a role for TGF-β1 in the growth regulation of normal ureteral cells and implicate caveolar membrane domains in the negative regulation of TGF-β1 signaling. These studies may be relevant to ureteral pathologies that are characterized by smooth muscle dysplasia.