The epithelial inner layer of the lower urinary tract, i.e., the urothelium, and other parts of the mucosa are not just a passive barrier but play an active role in the sensing of stretching, neurotransmitters, paracrine mediators, hormones, and growth factors and of changes in the extracellular environment. We review the molecular and cellular mechanisms enabling the urothelium to sense such inputs and how this leads to modulation of smooth muscle contraction and relaxation. The urothelium releases various mediators including ATP, acetylcholine, prostaglandins, nitric oxide, and nerve growth factor. These may affect function and growth of smooth muscle cells and afferent nerves. However, the molecular identity of the urothelium-derived mediator directly modulating contractile and relaxant responses of isolated bladder strips has remained elusive. The morphology and function of the urothelium undergo changes with aging and in many pathophysiological conditions. Therefore, the urothelium may contribute to the therapeutic effects of established drugs to treat lower urinary tract dysfunction and may also serve as a target for novel therapeutics. However, therapeutics may also change urothelial function, and it is not always easy to determine whether such changes are part of the therapeutic response or reflect secondary alterations.