Caveolae are striking morphological features of the plasma membrane of mammalian cells. Caveolins, the major proteins of caveolae, play a crucial role in the formation of these invaginations of the plasma membrane; however, the precise mechanisms involved are only just starting to be unravelled. Recent studies suggest that caveolae are stable structures first generated in the Golgi complex. Their formation and exit from the Golgi complex is associated with caveolin oligomerisation, acquisition of detergent insolubility, and association with cholesterol. Modelling of caveolin-membrane interactions together with in vitro studies of caveolin peptides are providing new insights into how caveolin-lipid interactions could generate the unique architecture of the caveolar domain.