We have studied caveolin-1 expression and the frequency and distribution of typical invaginated caveolae as they are identified by electron microscopy in the polarized epithelial cell lines MDCK II and Caco-2. In wild-type MDCK II cells caveolin expression is high and more than 400 caveolae/mm filter were observed at the basolateral membrane. No caveolae were found at the apical surface. By contrast, wild-type Caco-2 cells do not express caveolin-1 and have extremely few, if any caveolae. Caco-2 cells were stably transfected with the gene for caveolin-1 in order to investigate if the formation of caveolae is polarized also in these cells. We have isolated Caco-2 clones expressing different levels of caveolin-1, where the level of expression varies from 10-100% of the endogenous level in MDCK II cells. Caveolin-1 expression in Caco-2 cells gives rise to a marked immunofluorescense labeling mainly at the lateral plasma membrane. By electron microscopy an increase from less than 4 caveolae/mm filter in wild-type Caco-2 cells to 21-76 caveolae/mm filter in Caco-2 clones transfected with caveolin-1 was revealed and these caveolae were exclusively localized to the basolateral membrane. Thus expression of heterologous caveolin-1 in Caco-2 cells leads to polarized formation of caveolae, but there is a lack of correlation between the amount of caveolin expressed in the cells and the number of caveolae, suggesting that factors in addition to caveolin are required for generation of caveolae.