Betaglycan, also known as the transforming growth factor-beta (TGF-beta) type III receptor, is a membrane-anchored proteoglycan that binds TGF-beta via its core protein. Deletion mutagenesis analysis has revealed two regions of betaglycan ectodomain capable of binding TGF-beta: one at the amino-terminal half, the endoglin-related region (López-Casillas, F., Payne, H., Andres, J. L., and Massagué, J. (1994) J. Cell Biol. 124, 557-568), and the other at the carboxyl-terminal half, the uromodulin-related region (Pepin, M.-C., Beauchemin, M., Plamondon, J., and O'Connor-McCourt, M. D. (1994) Proc. Natl. Acad. Sci. U. S. A 91, 6997-7001). In the present work we have functionally characterized these ligand binding regions. Similar to the wild type receptor, both regions bind TGF-beta2 with higher affinity than TGF-beta1. However, only the endoglin-related region increases the TGF-beta2 labeling of the TGF-beta type II receptor, the so-called "TGF-beta -presentation" function of the wild type receptor. Despite this preference, both regions as well as the wild type receptor mediate the TGF-beta2-dependent Smad2 phosphorylation, indicating that they can function indistinguishably as TGF-beta-enhancing co-receptors. On the other hand, we found that the recently described ability of the wild type betaglycan to bind inhibin A is a property of the core protein that resides in the uromodulin-related region. Binding competition experiments indicate that this region binds inhibin and TGF-beta with the following relative affinities: TGF-beta2 > inhibin A > TGF-beta1. All together, the present results suggest that betaglycan ectodomain is endowed with two bona fide independent ligand binding domains that can perform specialized functions as co-receptors of distinct members of the TGF-beta superfamily.