Cell responses to bone morphogenetic proteins (BMP) depend on the expression and surface localisation of transmembrane receptors BMPR-IA, -IB and -II. The present study shows that all three antigens are readily detected in human bone cells. However, only BMPR-II was found primarily at the plasma membrane, whereas BMPR-IA was expressed equally in the cytoplasm and at the cell surface. Notably, BMPR-IB was mainly intracellular, where it was associated with a number of cytoplasmic structures and possibly the nucleus. Treatment with transforming growth factor beta1 (TGF-beta1) caused rapid translocation of BMPR-IB to the cell surface, mediated via the p38 mitogen-activated protein kinase (MAPK) and protein kinase C (PKC) pathways. The TGF-beta1-induced increase in surface BMPR-IB resulted in significantly elevated BMP-2 binding and Smad1/5/8 phosphorylation, although the receptor was subsequently internalised and the functional response to BMP-2 consequently down-regulated. The results show, for the first time, that BMPR-IB is localised primarily in intracellular compartments in bone cells and that TGF-beta1 induces rapid surface translocation from the cytoplasm to the cell surface, resulting in increased sensitivity of the cells to BMP-2.