Caveolin-1 (Cav1) is essential for the formation of caveolae. Little is known about their functional role in the kidney. We tested the hypothesis that caveolae modulate renal salt and water reabsorption. Wild-type (WT) and Cav1-deficient (Cav1-/-) mice were studied. Cav1 expression and caveolae formation were present in vascular cells, late distal convoluted tubule and principal connecting tubule and collecting duct cells of WT but not Cav1-/- kidneys. Urinary sodium excretion was increased by 94% and urine flow by 126% in Cav1-/- mice (p < 0.05). A decrease in activating phosphorylation of the Na-Cl cotransporter (NCC) of the distal convoluted tubule was recorded in Cav1-/- compared to WT kidneys (-40%; p < 0.05). Isolated intrarenal arteries from Cav1-/- mice revealed a fourfold reduction in sensitivity to phenylephrine (p < 0.05). A significantly diminished maximal contractile response (-13%; p < 0.05) was suggestive of enhanced nitric oxide (NO) availability. In line with this, the abundance of endothelial NO synthase (eNOS) was increased in Cav1-/- kidneys +213%; p < 0.05) and cultured caveolae-deprived cells showed intracellular accumulation of eNOS, compared to caveolae-intact controls. Our results suggest that renal caveolae help to conserve water and electrolytes via modulation of NCC function and regulation of vascular eNOS.