A wide range of mutations in the type II receptor for bone morphogenetic protein (BMPR-II) have been shown to underlie primary pulmonary hypertension. To determine the mechanism of altered BMPR-II function, we employed transient transfection studies in cell lines and primary cultures of pulmonary vascular smooth muscle cells using green fluorescent protein (GFP)-tagged wild-type and mutant BMPR2 constructs and confocal microscopy to localize receptors. Substitution of cysteine residues in the ligand binding or kinase domain prevented trafficking of BMPR-II to the cell surface, and reduced binding of (125)I-BMP4. In addition, transfection of cysteine-substituted BMPR-II markedly reduced basal and BMP4-stimulated transcriptional activity of a BMP/Smad responsive luciferase reporter gene (3GC2wt-Lux), compared with wild-type BMPR-II, suggesting a dominant-negative effect of these mutants on Smad signalling. In contrast, BMPR-II containing non-cysteine substitutions in the kinase domain were localized to the cell membrane, although these also suppressed the activity of 3GC2wt-Lux. Interestingly, BMPR-II mutations within the cytoplasmic tail trafficked to the cell surface, but retained the ability to activate 3GC2wt-Lux. Transfection of mutant, but not wild-type, constructs into a mouse epithelial cell line (NMuMG cells) led to activation of p38(MAPK) and increased serum-induced proliferation compared with the wild-type receptor, which was partly p38(MAPK)-dependent. We conclude that mutations in BMPR-II heterogeneously inhibit BMP/Smad-mediated signalling by diverse molecular mechanisms. However, all mutants studied demonstrate a gain of function involving upregulation of p38(MAPK)-dependent proproliferative pathways.