Several cell types express inducible nitric oxide synthase (NOS2) in response to exogenous insults such as bacterial lipopolysaccharide (LPS) or proinflammatory cytokines. For instance, muscular cells treated with LPS and interferon gamma (IFN-gamma) respond by increasing the mRNA and protein levels of NOS2, and synthesize large amounts of nitric oxide. We show here that transcriptional induction of NOS2 in muscular cells proceeds with a concomitant decrease in the levels of caveolin-1, -2 and -3. Addition of *NO-releasing compounds to C2C12 muscle cells reveals that this downregulation of the caveolin (cav) levels is due to the presence of *NO itself in the case of caveolin-3 and to the action of the LPS/IFN-gamma in the case of cav-1 and cav-2. Likewise, muscle cells obtained from NOS2(-/-) knockout mice challenged with LPS/IFN-gamma could downregulate their levels of cav-1 but not of cav-3, unlike wild-type animals, in which both cav-1 and cav-3 levels diminished in the presence of the proinflammatory insult. Laser confocal immunofluorescence analysis proves that *NO exerts autocrine and paracrine actions, hence diminishing the cav-3 levels. When the induced NOS2 was purified using an affinity resin or immunoprecipitated from muscular tissues, it appears strongly bound not only to calmodulin but also to cav-1, and marginally to cav-2 and cav-3. When the cav levels where reduced using antisense oligonucleotides, an increase in the NOS2-derived.NO levels could be measured, demonstrating the inhibitory role of the three cav isoforms. Our results show that cells expressing NOS2 diminish their cav levels when the synthesis of *NO is required.