We have examined the interaction of transforming growth factor (TGF)beta receptors with phosphatidylinositol 3-(PI3) kinase in epithelial cells. In COS7 cells, treatment with TGFbeta increased PI3 kinase activity as measured by the ability of p85-associated immune complexes to phosphorylate inositides in vitro. Both type I and type II TGFbeta receptors (TbetaR) associated with p85, but the association of TbetaRII appeared to be constitutive. The interaction of TbetaRI with p85 was induced by treatment with TGFbeta. The receptor association with PI3 kinase was not direct as (35)S-labeled rabbit reticulocyte p85 did not couple with fusion proteins containing type I and type II receptors. A kinase-dead, dominant-negative mutant of TbetaRII blocked ligand-induced p85-TbetaRI association and PI3 kinase activity. In TbetaRI-null R1B cells, TGFbeta did not stimulate PI3 kinase activity. This stimulation was restored upon reconstitution of TbetaRI by transfection. In R1B and NMuMG epithelial cells, overexpression of a dominant active mutant form of TbetaRI markedly enhanced ligand-independent PI3 kinase activity, which was blocked by the addition of the TbetaRI kinase inhibitor LY580276, suggesting a causal link between TbetaRI function and PI3 kinase. Overexpressed Smad7 also prevented ligand-induced PI3 kinase activity. Taken together, these data suggest that 1) TGFbeta receptors can indirectly associate with p85, 2) both receptors are required for ligand-induced PI3 kinase activation, and 3) the activated TbetaRI serine-threonine kinase can potently induce PI3 kinase activity.