Proteins in the TGF-beta superfamily transduce their effects through binding to type I and type II serine/threonine kinase receptors. Osteogenic protein-1 (OP-1, also known as bone morphogenetic protein-7 or BMP-7), a member of the TGF-beta superfamily which belongs to the BMP subfamily, was found to bind activin receptor type I (ActR-I), and BMP receptors type IA (BMPR-IA) and type IB (BMPR-IB) in the presence of activin receptors type II (ActR-II) and type IIB (ActR-IIB). The binding affinity of OP-1 to ActR-II was two- to threefold lower than that of activin A. A transcriptional activation signal was transduced after binding of OP-1 to the complex of ActR-I and ActR-II, or that of BMPR-IB and ActR-II. These results indicate that ActR-II can act as a functional type II receptor for OP-1, as well as for activins. Some of the known biological effects of activin were observed for OP-1, including growth inhibition and erythroid differentiation induction. Compared to activin, OP-1 was shown to be a poor inducer of mesoderm in Xenopus embryos. Moreover, follistatin, an inhibitor of activins, was found to inhibit the effects of OP-1, if added at a 10-fold excess. However, certain effects of activin, like induction of follicle stimulating hormone secretion in rat pituitary cells were not observed for OP-1. OP-1 has overlapping binding specificities with activins, and shares certain but not all of the functional effects of activins. Thus, OP-1 may have broader effects in vivo than hitherto recognized.