Airway smooth muscle cells exhibit phenotype plasticity that underpins their ability to contribute both to acute bronchospasm and to the features of airway remodelling in chronic asthma. A feature of mature, contractile smooth muscle cells is the presence of abundant caveolae, plasma membrane invaginations that develop from the association of lipid rafts with caveolin-1, but the functional role of caveolae and caveolin-1 in smooth muscle phenotype plasticity is unknown. Here, we report a key role for caveolin-1 in promoting phenotype maturation of differentiated airway smooth muscle induced by transforming growth factor (TGF)-β1. As assessed by Western analysis and laser scanning cytometry, caveolin-1 protein expression was selectively enriched in contractile phenotype airway myocytes. Treatment with TGF-β1 induced profound increases in the contractile phenotype markers sm-α-actin and calponin in cells that also accumulated abundant caveolin-1; however, siRNA or shRNAi inhibition of caveolin-1 expression largely prevented the induction of these contractile phenotype marker proteins by TGF-β1. The failure by TGF-β1 to adequately induce the expression of these smooth muscle specific proteins was accompanied by a strongly impaired induction of eukaryotic initiation factor-4E binding protein(4E-BP)1 phosphorylation with caveolin-1 knockdown, indicating that caveolin-1 expression promotes TGF-β1 signalling associated with myocyte maturation and hypertrophy. Furthermore, we observed increased expression of caveolin-1 within the airway smooth muscle bundle of guinea pigs repeatedly challenged with allergen, which was associated with increased contractile protein expression, thus providing in vivo evidence linking caveolin-1 expression with accumulation of contractile phenotype myocytes. Collectively, we identify a new function for caveolin-1 in controlling smooth muscle phenotype; this mechanism could contribute to allergic asthma.