Sarcomas represent a heterogeneous group of tumors with a complex and difficult reproducible classification. Their pathogenesis is poorly understood and there are few effective treatment options for advanced disease. Caveolin-1 is a multifunctional scaffolding protein with multiple binding partners that regulates multiple cancer-associated processes including cellular transformation, tumor growth, cell death and survival, multidrug resistance, angiogenesis, cell migration and metastasis. However, ambiguous roles have been ascribed to caveolin-1 in signal transduction and cancer, including sarcomas. In particular, evidence indicating that caveolin-1 function is cell context dependent has been repeatedly reported. Caveolin-1 appears to act as a tumor suppressor protein at early stages of cancer progression. In contrast, a growing body of evidence indicates that caveolin-1 is up-regulated in several multidrug-resistant and metastatic cancer cell lines and human tumor specimens. This review is focused on the role of caveolin-1 in several soft tissue and bone sarcomas and discusses the use of this protein as a potential diagnostic and prognostic marker and as a therapeutic target.