Bone morphogenic proteins (BMPs) are universal regulators of animal development. We report the identification and cloning of the BMP type II receptor (BMPR-II), a missing component of this receptor system in vertebrates. BMPR-II is a transmembrane serine/threonine kinase that binds BMP-2 and BMP-7 in association with multiple type I receptors, including BMPR-IA/Brk1, BMPR-IB, and ActR-I, which is also an activin type I receptor. Cloning of BMPR-II resulted from a strong interaction of its cytoplasmic domain with diverse transforming growth factor beta family type I receptor cytoplasmic domains in a yeast two-hybrid system. In mammalian cells, however, the interaction of BMPR-II is restricted to BMP type I receptors and is ligand dependent. BMPR-II binds BMP-2 and -7 on its own, but binding is enhanced by coexpression of type I BMP receptors. BMP-2 and BMP-7 can induce a transcriptional response when added to cells coexpressing ActR-I and BMPR-II but not to cells expressing either receptor alone. The kinase activity of both receptors is essential for signaling. Thus, despite their ability to bind to type I and II receptors receptors separately, BMPs appear to require the cooperation of these two receptors for optimal binding and for signal transduction. The combinatorial nature of these receptors and their capacity to crosstalk with the activin receptor system may underlie the multifunctional nature of their ligands.