Caveolae are the cholesterol-rich small invaginations of the plasma membrane present in many cell types including adipocytes, endothelial cells, epithelial cells, fibroblasts, smooth muscles, skeletal muscles and cardiac muscles. They serve as specialized platforms for many signaling molecules and regulate important cellular processes like energy metabolism, lipid metabolism, mitochondria homeostasis, and mechano-transduction. Caveolae can be internalized together with associated cargo. The caveolae-dependent endocytic pathway plays a role in the withdrawal of many plasma membrane components that can be sent for degradation or recycled back to the cell surface. Caveolae are formed by oligomerization of caveolin proteins. Caveolin-3 is a muscle-specific isoform, whose malfunction is associated with several diseases including diabetes, cancer, atherosclerosis, and cardiovascular diseases. Mutations in Caveolin-3 are known to cause muscular dystrophies that are collectively called caveolinopathies. Altered expression of Caveolin-3 is also observed in Duchenne’s muscular dystrophy, which is likely a part of the pathological process leading to muscle weakness. This review summarizes the major functions of Caveolin-3 in skeletal muscles and discusses its involvement in the pathology of muscular dystrophies.