Neuronal nitric oxide synthase (nNOS) in myenteric neurons is activated during peristalsis to produce nitric oxide which relaxes intestinal smooth muscle. A putative nNOS is also found in the membrane of intestinal smooth muscle cells in mouse and dog. In this study we studied the possible functions of this nNOS expressed in mouse small intestinal smooth muscle colocalized with caveolin-1(Cav-1). Cav-1 knockout mice lacked nNOS in smooth muscle and provided control tissues. 60 mM KCl was used to increase intracellular [Ca2+] through L-type Ca2+ channel opening and stimulate smooth muscle NOS activity in intestinal tissue segments. An additional contractile response to LNNA (100 μM, NOS inhibitor) was observed in KCl-contracted tissues from control mice and was almost absent in tissues from Cav-1 knockout mice. Disruption of caveolae with 40 mM methyl-β cyclodextrin in tissues from control mice led to the loss of Cav-1 and nNOS immunoreactivity from smooth muscle as shown by immunohistochemistry and a reduction in the response of these tissues to N-ω-nitro-L-arginine (LNNA). Reconstitution of membrane cholesterol using water soluble cholesterol in the depleted segments restored the immunoreactivity and the response to LNNA added after KCl. Nicardipine (1 μM) blocked the responses to KCl and LNNA confirming the role of L-type Ca2+ channels. ODQ (1 μM, soluble guanylate cyclase inhibitor) had the same effect as inhibition of NOS following KCl. We conclude that the activation of nNOS, localized in smooth muscle caveolae, by calcium entering through L-type calcium channels triggers nitric oxide production which modulates muscle contraction by a cGMP-dependent mechanism.