Colocalization of endothelial nitric oxide synthase (eNOS) and capacitative Ca2+ entry (CCE) channels in microdomains such as cavaeolae in endothelial cells (ECs) has been shown to significantly affect intracellular Ca2+ dynamics and NO production, but the effect has not been well quantified. We developed a two-dimensional continuum model of an EC integrating shear stress-mediated ATP production, intracellular Ca2+ mobilization, and eNOS activation to investigate the effects of spatial colocalization of plasma membrane eNOS and CCE channels on Ca2+ dynamics and NO production in response to flow-induced shear stress. Our model examines the hypothesis that subcellular colocalization of cellular components can be critical for optimal coupling of NO production to blood flow. Our simulations predict that heterogeneity of CCE can result in formation of microdomains with significantly higher Ca2+ compared to the average cytosolic Ca2+. Ca2+ buffers with lower or no mobility further enhanced Ca2+ gradients relative to mobile buffers. Colocalization of eNOS to CCE channels significantly increased NO production. Our results provide quantitative understanding for the role of spatial heterogeneity and the compartmentalization of signals in regulation of shear stress-induced NO production.