Transforming growth factor-β binds to the TGFβ family of heteromeric serine/threonine transmembrane receptors (type I and type II). Following binding of TGFβ, the type II receptor (TβR-II) phosphorylates the type I receptor (TβR-I) which, in turn, conveys the signal. Since TβR-I and TβR-II can interact without the stimulation of TGFβ, leading to unwanted activation, a regulatory mechanism exists. In a yeast genetic screen, immunophilin FKBP12 was associated with the type I receptor. Studies including co-immunoprecipiation, deletion, and point mutations confirmed this interaction. FKBP12 inhibits TβR-II mediated phosphorylation of TβR-I, inhibiting activation. FKBP12 binds via its rapamycin/Leu-Pro binding pocket to the Leu-Pro sequence adjacent to the phosphorylation site of TβR-I. This interaction is blocked by the addition of macrolides, rapamycin, and FK506. Furthermore, mutations in the binding sites of FKBP12 and TβR-I abrogates the binding and results in activation of the receptor without the addition of TGFβ. Thus, FKBP12 is a regulatory protein for TβR-I and TβR-II-mediated signaling.