Erectile dysfunction is caused by a variety of pathogenic factors, particularly impaired formation and action of nitric oxide (NO). NO released from nerve endings and corpus cavernosum endothelial cells plays a crucial role in initiating and maintaining increased intracavernous pressure, penile vasodilatation, and penile erection. Classically, these effects are dependent on cGMP synthesized during activation of soluble guanylyl cyclase (sGC) by NO in smooth muscle cells. The enzyme NO synthase in endothelial cells (eNOS) has been localized to caveolae, small invaginations of the plasma membrane rich in cholesterol. Membrane cholesterol depletion impairs acetylcholine-induced relaxation in arteries due to an alteration in caveolar structure. It has been shown that sGC may be activated in endothelial caveolae contributing to vasodilation. We hypothesized that caveolae are the platform for sGC/cGMP signaling in cavernosum smooth muscle eliciting erection. Methyl--cyclodextrin, a pharmacological tool to deplete membrane cholesterol and disassemble caveolae, impaired rat erectile responses in vivo and cavernosum smooth muscle relaxation induced by the NO donor sodium nitroprusside and the sGC activator 3-(5'-hydroxymethyl-2'furyl)-1-benzyl indazole (YC-1) in vitro. Methyl--cyclodextrin had no effect on cavernosum smooth muscle relaxation induced by NO released upon nerve stimulation or by exogenous cGMP. Furthermore, it was found that sGC and caveolin-1, the major coat protein of caveolae, were co-localized in rat corpus cavernosum sinusoidal endothelium. Electron microscopy indicated caveolae disruption in corpus cavernosum treated with methyl--cyclodextrin. In summary, our results provide evidence of compartmentalization of sGC in the caveolae of cavernosal endothelial cells contributing to NO signaling mediating smooth muscle relaxation and erection.