Transforming growth factor-beta (TGF-beta) signals by contacting two distantly related transmembrane serine/threonine kinases called receptors I (T beta R-I) and II (T beta R-II). TGF-beta binds to T beta R-II, which is a constitutively active kinase and this complex recruits T beta R-I, causing its phosphorylation and signal propagation to downstream substrates. The biochemical properties of this interaction were analyzed with reconstituted receptor systems. T beta R-I and T beta R-II baculovirally expressed at high levels in insect cells have the ligand binding properties of receptors expressed in mammalian cells, and form a complex in which T beta R-I phosphorylation is dependent on the kinase activity of T beta R-II. Furthermore, T beta R-I and T beta R-II can form a complex in vitro, and their cytoplasmic domains can specifically interact in a yeast two-hybrid system. In vitro complex formation with catalytically active T beta R-II is necessary and sufficient for T beta R-I phosphorylation, which within this complex does not require the catalytic activity of T beta R-I, thus mimicking T beta R-I phosphorylation in intact cells. In addition, T beta R-I phosphorylated in vitro remains associated with T beta R-II. These results suggest that T beta R-I and T beta R-II have affinity for each other, however, the ligand is required for stable complex formation under physiological conditions. Once formed, this complex is sufficient for T beta R-I phosphorylation by T beta R-II.