Transforming growth factor-1 (TGF-1) has been implicated to play an important role both in the process of normal development and in the pathogenesis of a wide variety of disease processes, including those of the kidney. TGF-1 regulates diverse cellular functions via a heteromeric signaling complex of two transmembrane serine/threonine kinase receptors (types I and II). Several distinct type I receptors have been described and are thought to determine specificity of the TGF- response and confer multifunctionality. This report reveals the cloning of a novel, naturally occurring soluble form of TGF- type I receptor, designated sTR-I, from a rat kidney cDNA library. In vivo expression of a mRNA transcript encoding the sTR-I, which lacks the transmembrane and cytoplasmic domains, is confirmed by RT-PCR followed by Southern blot analysis and by RNase protection assay. The sTR-I mRNA abundance is greater in the neonatal rat kidney compared with the adult rat kidney. Furthermore, sTR-I is a functional protein capable of binding TGF-1 ligands in the presence of a TGF- type II receptor on the cell surface, as determined by affinity cross-linking with ¹²⁵I-labeled TGF-1. Studies using p3TP-Lux reporter construct reveal that this novel protein may function as a potentiator of TGF- signaling. The discovery of a sTR-I provides an additional level of complexity to the TGF- receptor system.