The dystrophin-glycoprotein complex (DGC) links the extracellular matrix and actin cytoskeleton. Caveolae form membrane arrays on smooth muscle cells; we investigated the mechanism for this organization. Caveolin-1 and beta-dystroglycan, the core transmembrane DGC subunit, colocalize in airway smooth muscle. Immunoprecipitation revealed the association of caveolin-1 with beta-dystroglycan. Disruption of actin filaments disordered caveolae arrays, reduced association of beta-dystroglycan and caveolin-1 to lipid rafts, and suppressed the sensitivity and responsiveness of methacholine-induced intracellular Ca2+ release. We generated novel human airway smooth muscle cell lines expressing shRNA to stably silence beta-dystroglycan expression. In these myocytes, caveolae arrays were disorganized, caveolae structural proteins caveolin-1 and PTRF/cavin were displaced, the signaling proteins PLCbeta1 and G(alphaq), which are required for receptor-mediated Ca2+ release, were absent from caveolae, and the sensitivity and responsiveness of methacholine-induced intracellular Ca2+ release, was diminished. These data reveal an interaction between caveolin-1 and beta-dystroglycan and demonstrate that this association, in concert with anchorage to the actin cytoskeleton, underpins the spatial organization and functional role of caveolae in receptor-mediated Ca2+ release, which is an essential initiator step in smooth muscle contraction.