In atrial and nodal cardiac myocytes, M2 muscarinic receptors activate inhibitory G-proteins (G(i/o)), which in turn stimulate G-protein-gated inwardly rectifying K(+) channels through direct binding of the Gbetagamma subunit. Despite also releasing Gbetagamma, G(s)-coupled receptors such as the beta-adrenergic receptor are not able to prominently activate this current. An appealing hypothesis would be if components were sequestered in membrane domains such as caveolae/rafts. Using biochemical fractionation followed by Western blotting and/or radioligand binding experiments, we examined the distribution of the components in stable HEK293 and HL-1 cells, which natively express the transduction cascade. The channel, M2 muscarinic, and A1 adenosine receptors were located in noncaveolar/nonraft fractions. G(i)alpha(1/2) was enriched in both caveolar/raft and noncaveolar/nonraft fractions. In contrast, G(s)alpha was only enriched in caveolar/raft fractions. We constructed YFP-tagged caveolin-2 (YFP-Cav2) and chimeras with the M2 (M2-YFP-Cav2) and A1 (A1-YFP-Cav2) receptors. Analysis of gradient fractions showed that these receptor chimeras were now localized to caveolae-enriched fractions. Microscopy showed that M2-YFP and A1-YFP had a diffuse homogenous membrane signal. YFP-Cav2, M2-YFP-Cav2, and A1-YFP-Cav2 revealed a more punctuate pattern. Finally, we looked at the consequences for signaling. Activation via M2-YFP-Cav2 or A1-YFP-Cav2 revealed substantially slower kinetics compared with M2-YFP or A1-YFP and was reversed by the addition of methyl-beta-cyclodextrin. Thus the localization of the channel signal transduction cascade in non-cholesterol rich domains substantially enhances the speed of signaling. The presence of G(s)alpha solely in caveolae may account for signaling selectivity between G(i/o) and G(s)-coupled receptors.