The transforming growth factor beta (TGF-beta) type II receptor (T beta R-II) is a transmembrane serine/threonine kinase that contains two inserts in the kinase region and a serine/threonine-rich C-terminal extension. T beta R-II is required for TGF-beta binding to the type I receptor, with which it forms a heteromeric receptor complex, and its kinase activity is required for signaling by this complex. We investigated the role of various cytoplasmic regions in T beta R-II by altering or deleting these regions and determining the signaling activity of the resulting products in cell lines made resistant to TGF-beta by inactivation of the endogenous T beta R-II. TGF-beta binding to receptor I and responsiveness to TGF-beta in these cells can be restored by transfection of wild-type T beta R-II. Using this system, we show that the kinase insert 1 and the C-terminal tail of T beta R-II, in contrast to the corresponding regions in most tyrosine kinase receptors, are not essential to specify ligand-induced responses. Insert 2 is necessary to support the catalytic activity of the receptor kinase, and its deletion yields a receptor that is unable to mediate any of the responses tested. However, substitution of this insert with insert 2 from the activin receptor, ActR-IIB, does not diminish the ability of T beta R-II to elicit these responses. A truncated T beta R-II lacking the cytoplasmic domain still binds TGF-beta, supports ligand binding to receptor I, and forms a complex with this receptor. However, TGF-beta binding to receptor I facilitated by this truncated T beta R-II fails to inhibit cell proliferation, activate extracellular matrix protein production, or activate transcription from a promoter containing TGF-beta-responsive elements. We conclude that the transcriptional and antiproliferative responses to TGF-beta require both components of a heteromeric receptor complex that differs from tyrosine kinase receptors in its mode of signaling.