Transforming growth factor-beta (TGF-beta) signals through two transmembrane serine/threonine kinases, T beta R-I and T beta R-II. TGF-beta binds to T beta R-II, allowing this receptor to associate with and phosphorylate T beta R-I which then propagates the signal. T beta R-I is phosphorylated within its GS domain, a region immediately preceding the kinase domain. To further understand the function of T beta R-I in this complex, we analyzed T beta R-I-inactivating mutations identified in cell lines that are defective in TGF-beta signaling yet retain ligand binding ability. The three mutations identified here all fall in the kinase domain of T beta R-I. One mutation disrupts the kinase activity of T beta R-I, whereas the other two mutations prevent ligand-induced T beta R-I phosphorylation, and thus activation, by T beta R-II. Unexpectedly, a kinase-defective T beta R-I mutant can functionally complement an activation- defective T beta R-I mutant, by rescuing its T beta R-II- dependent phosphorylation. Together with evidence that the ligand-induced receptor complex contains two or more T beta R-I molecules, these results support a model in which the kinase domain of one T beta R-I molecule interacts with the GS domain of another, enabling its phosphorylation and activation by T beta R-II. This cooperative interaction between T beta R-I molecules appears essential for TGF-beta signal transduction.