Glycosphingolipid- and cholesterol-enriched microdomains, or rafts, within the plasma membrane of eukaryotic cells have been implicated in many important cellular processes, such as polarized sorting of apical membrane proteins in epithelial cells and signal transduction. Until recently, however, the existence of such domains remained controversial. The past year has brought compelling evidence that microdomains indeed exist in living cells. In addition, several recent papers have suggested that caveolae, which are considered to be a specific form of raft, and caveolins, the major membrane proteins of caveolae, are involved in the dynamic cholesterol-dependent regulation of specific signal transduction pathways.