The bone morphogenetic protein (BMP) family, the largest subfamily of the structurally conserved transforming growth factor-β (TGF-β) superfamily of growth factors, are multifunctional regulators of development, proliferation, and differentiation. The TGF-β type III receptor (TβRIII or betaglycan) is an abundant cell surface proteoglycan that has been well characterized as a TGF-β and inhibin receptor. Here we demonstrate that TβRIII functions as a BMP cell surface receptor. TβRIII directly and specifically binds to multiple members of the BMP subfamily, including BMP-2, BMP-4, BMP-7, and GDF-5, with similar kinetics and ligand binding domains as previously identified for TGF-β. TβRIII also enhances ligand binding to the BMP type I receptors, whereas short hairpin RNA-mediated silencing of endogenous TβRIII attenuates BMP-mediated Smad1 phosphorylation. Using a biologically relevant model for TβRIII function, we demonstrate that BMP-2 specifically stimulates TβRIII-mediated epithelial to mesenchymal cell transformation. The ability of TβRIII to serve as a cell surface receptor and mediate BMP, inhibin, and TGF-β signaling suggests a broader role for TβRIII in orchestrating TGF-β superfamily signaling.