Mutations of bone morphogenetic protein receptor type II (BMPR-II) have been associated with familial and idiopathic pulmonary arterial hypertension (PAH). BMPR-II is a member of the transforming growth factor-beta receptor superfamily. It consists of extracellular, transmembrane, and kinase domains, and a unique C-terminus with mostly unknown function. However, a number of PAH-causing mutations are predicted to truncate the C-terminus, suggesting that this domain plays an important role in the homeostasis of pulmonary vessels. In this study, we sought to elucidate the functional role of this C-terminus by seeking its interacting partners. Using yeast two-hybrid screening, we identified c-Src tyrosine kinase as a binding partner of this C-terminus. In vitro co-immunoprecipitation confirmed their interaction. Mutations truncating the C-terminus disrupted their interaction, while missense mutation within kinase domain reduced their interaction. In addition, BMPR-II and c-Src tyrosine kinase colocalized within intracellular aggregates when overexpressed in HEK293 cells. Moreover, mutations truncating the C-terminus disrupted their colocalization, whereas missense mutation within kinase domain had no effect on their colocalization. Furthermore, BMP ligand stimulation decreased c-Src-activating phosphorylation at Tyrosine 418 in pulmonary smooth muscle cells in both time- and concentration-dependent manners. Mutations that truncated the C-terminus abolished this response. Taken together, these results suggest a model in which proliferative effect of c-Src by vasoactive molecules is balanced by opposing effect of BMP signaling in basal state, and the loss of this balance due to BMPR2 mutations leads to increased c-Src activity and subsequently cell growth.