We have previously proposed that transforming growth factor (TGF)-beta receptor activation occurs via a relative rotation between the receptors. This model suggests that in the absence of the ligand the receptor extracellular domain negatively regulates the activation of the receptor complex To investigate this proposition, four TGF-beta type I and II receptor extracellular/transmembrane-cytoplasmic and extracellular-transmembrane/cytoplasmic chimeras, T beta RII-I-I and T beta RI-II-II as well as T beta RII-II-I and T beta RI-I-II, and two extracellular domain truncated receptors T beta RI-STC and T beta RII-STC were generated. In either mutant mink lung R1B (lacking functional type I receptor) or DR26 (where the type II receptor is nonfunctional) cells, coexpression of two chimeric receptors, which are complementary in extracellular and cytoplasmic domains, transduced TGF-beta induced signaling, as measured by the transcriptional activation of a p3TP-Lux reporter gene. Coexpression of this type of chimeric receptor with a wild-type receptor containing the opposite cytoplasmic domain exhibited a varied level of constitutive activity depending on the particular combination of the extracellular domains. In general, the type I-type I extracellular domain combination gave higher constitutive activity than the type I-type II or type II-type IZ combinations. Furthermore, coexpression of the extracellular domain truncated receptor with any receptor containing the opposite cytoplasmic domain always resulted in ligand independent receptor signaling. Immunoprecipitation studies showed that the formation of the receptor complexes paralleled the ligand independent activation of p3TP-Lux. Our results support the conclusion that the TGF-beta receptor extracellular domain plays a negative regulatory role in receptor activation in the absence of ligand.