Cells respond to hypoosmotic stress by initial swelling followed by intracellular increases in the number of osmolytes and initiation of gene transcription that allow cells to adapt to the stress. Here, we have studied the genes that change expression under mild hypoosmotic stress for 12 and 24 h in rat cultured smooth muscle cells (WKO-3M22). We find shifts in the transcription of many genes, several of which are associated with circadian rhythm, such as per1, nr1d1, per2, dbp, and Ciart. To determine whether there is a connection between osmotic stress and circadian rhythm, we first subjected cells to hypoosmotic stress for 12 h, and find that Bmal1, a transcription factor whose nuclear localization promotes transit through the cell cycle, localizes to the cytoplasm, which may connect osmotic stress to cell cycle. Bmal1 nuclear localization recovers after 24 h and cell cycle resumes even though the osmotic stress remains elevated. We hypothesized that osmotic force is transmitted into the cell by deforming caveolae membrane domains releasing one of its structural proteins, cavin-1, which can travel to the nucleus and affect gene transcription. In support of this idea, we find that Bmal1 localization becomes independent of osmotic stress with cavin-1 downregulation, and Bmal1 localization is independent of osmotic stress in a cell line with low caveolae expression. These studies indicate that osmotic stress transiently arrests circadian rhythm and cell-cycle progression through caveolae deformation.