Vascular endothelial cells undergo albumin endocytosis using a set of albumin binding proteins. This process is important for maintaining cellular homeostasis. We showed by several criteria that the previously described 73-kDa endothelial cell surface albumin binding protein is the 75-kDa transforming growth factor (TGF)-beta receptor type II (TbetaRII). Albumin coimmunoprecipitated with TbetaRII from a membrane fraction from rat lung microvascular endothelial cells. Albumin endocytosis-negative COS-7 cells became albumin endocytosis competent when transfected with wild-type TbetaRII but not when transfected with a domain-negative kinase mutant of TbetaRII. An antibody specific for TbetaRII inhibited albumin endocytosis. A mink lung epithelial cell line, which expresses both the TGF-beta receptor type I (TbetaRI) and the TbetaRII receptor, exhibited albumin binding to the cell surface and endocytosis. In contrast, mutant L-17 and DR-26 cells lacking TbetaRI or TbetaRII, respectively, each showed a dramatic reduction in binding and endocytosis. Albumin endocytosis induced Smad2 phosphorylation and Smad4 translocation as well as increased protein expression of the inhibitory Smad, Smad7. We identified regions of significant homology between amino acid sequences of albumin and TGF-beta, suggesting a structural basis for the interaction of albumin with the TGF-beta receptors and subsequent activation of TbetaRII signaling. The observed albumin-induced internalization of TbetaRII signaling may be an important mechanism in the vessel wall for controlling TGF-beta responses in endothelial cells.