The bone morphogenetic protein (BMP) family, the largest subfamily of the structurally conserved transforming growth factor-beta(TGF-beta) superfamily of growth factors, are multifunctional regulators of development, proliferation, and differentiation. The TGF-beta type III receptor (T beta RIII or betaglycan) is an abundant cell surface proteoglycan that has been well characterized as a TGF-beta and inhibin receptor. Here we demonstrate that T beta RIII functions as a BMP cell surface receptor. T beta RIII directly and specifically binds to multiple members of the BMP subfamily, including BMP-2, BMP-4, BMP-7, and GDF-5, with similar kinetics and ligand binding domains as previously identified for TGF-beta. T beta RIII also enhances ligand binding to the BMP type I receptors, whereas short hairpin RNA-mediated silencing of endogenous T beta RIII attenuates BMP-mediated Smad1 phosphorylation. Using a biologically relevant model for T beta RIII function, we demonstrate that BMP-2 specifically stimulates T beta RIII-mediated epithelial to mesenchymal cell transformation. The ability of T beta RIII to serve as a cell surface receptor and mediate BMP, inhibin, and TGF-beta signaling suggests a broader role for T beta RIII in orchestrating TGF-beta superfamily signaling.