A cDNA encoding the TGF-beta type II receptor protein has been isolated by an expression cloning strategy. The cloned cDNA, when transfected into COS cells, leads to overexpression of an approximately 80 kd protein that specifically binds radioiodinated TGF-beta 1. Excess TGF-beta 1 competes for binding of radioiodinated TGF-beta 1 in a dose-dependent manner and is more effective than TGF-beta 2. The predicted receptor structure includes a cysteine-rich extracellular domain, a single hydrophobic transmembrane domain, and a predicted cytoplasmic serine/threonine kinase domain. A chimeric protein containing the intracellular domain of the type II receptor and expressed in E. coli can phosphorylate itself on serine and threonine residues in vitro, indicating that the cytoplasmic domain of the type II receptor is a functional kinase. This result implicates serine/threonine phosphorylation as an important mechanism of TGF-beta receptor-mediated signaling.