Growth/differentiation factor-5 (GDF-5) is a member of the bone morphogenetic protein (BMP) family, which plays an important role in bone development in vivo. Mutations in the GDF-5 gene result in brachypodism in mice and Hunter-Thompson type chondrodysplasia in human. BMPs transduce their effects through binding to two different types of serine/threonine kinase receptors, type I and type II. However, binding abilities appear to be different among the members of the BMP family. BMP-4 binds to two different type I receptors, BMP receptors type IA (BMPR-IA) and type IB (BMPR-IB), and a type II receptor, BMP receptor type II (BMPR-II). In addition to these receptors, osteogenic protein-1 (OP-1, also known as BMP-7) binds to activin type I receptor (ActR-I) as well as activin type II receptors (ActR-II and ActR-IIB). Here we investigate the binding and signaling properties of GDF-5 through type I and type II receptors. GDF-5 induced alkaline phosphatase activity in a rat osteoprogenitor-like cell line, ROB-C26. 125I-GDF-5 bound to BMPR-IB and BMPR-II but not to BMPR-IA in ROB-C26 cells and other nontransfected cell lines. Analysis using COS-1 cells transfected with the receptor cDNAs revealed that GDF-5 bound to BMPR-IB but not to the other type I receptors when expressed alone. When COS-1 cells were transfected with type II receptor cDNAs, GDF-5 bound to ActR-II, ActR-IIB, and BMPR-II but not to transforming growth factor-beta type II receptor. In the presence of type II receptors, GDF-5 bound to different sets of type I receptors, but the binding was most efficient to BMPR-IB compared with the other type I receptors. Moreover, a transcriptional activation signal was efficiently transduced by BMPR-IB in the presence of BMPR-II or ActR-II after stimulation by GDF-5. These results suggest that BMPR-IB mediates certain signals for GDF-5 after forming the heteromeric complex with BMPR-II or ActR-II.