Using a powerful expression cloning method in COS cells, we have cloned the TGF-beta types II and III receptors. The type III TGF-beta receptor is a membrane-bound proteoglycan with a core protein of about 110 kDa. Stable expression of the type III receptor in L6 myoblasts leads to an apparent increase in the ability of the type II receptor to bind iodinated TGF-beta 1. The cloned type II receptor has a predicted protein core of about 60 kDa with a cysteine-rich extracellular domain, a single transmembrane domain, and a functional serine/threonine kinase domain that is homologous to the activin receptor and to the C. elegans protein daf-1. These results implicate serine/threonine phosphorylation as an important mechanism of TGF-beta action.