Caveolin‐1, a putative mediator of intracellular cholesterol transport, is generally assumed to be integrated into the cytoplasmic leaflets of all cellular membranes. Lipid droplets form by budding at the endoplasmic reticulum (ER), and caveolin‐1 is thought to be transferred to the droplet surface along with the cytoplasmic leaflet of ER membranes and not to enter the droplet core. We explored how caveolin‐1 accesses lipid droplets from the ER by localizing caveolin‐1 in ER membranes and in lipid droplets in cultured smooth muscle cells using freeze‐fracture immunocytochemistry. We detected caveolin‐1 in endoplasmic leaflets of ER membranes but never in cytoplasmic leaflets. Caveolin‐1 was also present in lipid droplet cores. These findings are incompatible with the current hypothesis of lipid droplet biogenesis. We suggest that the inherent high affinity of caveolin‐1 for neutral lipids causes caveolin‐1 molecules to be extracted from the endoplasmic leaflets of ER membranes and to be transferred into the droplet core by inundating lipids during droplet formation.