Transforming growth factor-betas (TGF-beta) are multifunctional proteins capable of either stimulating or inhibiting mitosis, depending on the cell type. These diverse cellular responses are caused by stimulating a single receptor complex composed of type I and type II receptors. Using a chimeric receptor model where the granulocyte/monocyte colony-stimulating factor receptor ligand binding domains are fused to the transmembrane and cytoplasmic signaling domains of the TGF-beta type I and II receptors, we wished to describe the role(s) of specific amino acid residues in regulating ligand-mediated endocytosis and signaling in fibroblasts and epithelial cells. Specific point mutations were introduced at Y182, T200, and Y249 of the type I receptor and K277 and P525 of the type II receptor. Mutation of either Y182 or Y249, residues within two putative consensus tyrosine-based internalization motifs, had no effect on endocytosis or signaling. This is in contrast to mutation of T200 to valine, which resulted in ablation of signaling in both cell types, while only abolishing receptor down-regulation in fibroblasts. Moreover, in the absence of ligand, both fibroblasts and epithelial cells constitutively internalize and recycle the TGF-beta receptor complex back to the plasma membrane. The data indicate fundamental differences between mesenchymal and epithelial cells in endocytic sorting and suggest that ligand binding diverts heteromeric receptors from the default recycling pool to a pathway mediating receptor down-regulation and signaling.