Caveolin, a 21-24-kDa integral membrane protein, is a principal component of caveolar membranes in vivo. Caveolin interacts directly with heterotrimeric G-proteins and can functionally regulate their activity. Recently, a second caveolin gene has been identified and termed caveolin-2. Here, we report the molecular cloning and expression of a third member of the caveolin gene gamily, caveolin-3. Caveolin-3 is most closely related to caveolin-1 based on protein sequence homology; caveolin-1 and caveolin-3 are approximately 65% identical and approximately 85% similar. A single stretch of eight amino acids (FED-VIAEP) is identical in caveolin-1, -2, and -3. This conserved region may represent a "caveolin signature sequence" that is characteristic of members of the caveolin gene family. Caveolin-3 mRNA is expressed predominantly in muscle tissue-types (skeletal muscle, diaphragm, and heart) and is selectively induced during the differentiation of skeletal C2C12 myoblasts in culture. In many respects, caveolin-3 is similar to caveolin-1: (i) caveolin-3 migrates in velocity gradients as a high molecular mass complex; (ii) caveolin-3 colocalizes with caveolin-1 by immunofluorescence microscopy and cell fractionation studies; and (iii) a caveolin-3-derived polypeptide functionally suppresses the basal GTPase activity of purified heterotrimeric G-proteins. Identification of a muscle-specific member of the caveolin gene family may have implications for understanding the role of caveolin in different muscle cell types (smooth, cardiac, and skeletal) as previous morphological studies have demonstrated that caveolae are abundant in these cells. Our results also suggest that other as yet unknown caveolin family members are likely to exist and may be expressed in a regulated or tissue-specific fashion.