While transforming growth factor beta (TGFbeta) type III receptor (RIII) is known to increase TGFbeta1 binding to its type II receptor (RII), the significance of this phenomenon is not known. We used human breast cancer MCF-7 cells to study the role of RIII in regulating autocrine TGFbeta1 activity because they express very little RIII and no detectable autocrine TGFbeta activity. A tetracycline-repressible RIII expression vector was stably transfected into this cell line. Expression of RIII increased TGFbeta1 binding to TGFbeta type I receptor (RI) as well as RII. Treatment with tetracycline suppressed RIII expression and abolished TGFbeta1 binding to RI and RII. Growth of RIII-transfected cells was reduced by 40% when plated at low density on plastic. This reduction was reversed by tetracycline treatment and was partially reversed by treatment with a TGFbeta1 neutralizing antibody. The activity of a TGFbeta-responsive promoter construct when transiently transfected was more than 3-fold higher in the RIII-transfected cells than in the control cells. Treating the cells with tetracycline or the TGFbeta1 neutralizing antibody also significantly attenuated the increased promoter activity. These results suggest that expression of RIII restored autocrine TGFbeta1 activity in MCF-7 cells. The RIII-transfected cells were also much less clonogenic in soft agarose than the control cells indicating a reversion of progression. Thus, RIII may be essential for an optimal level of the autocrine TGFbeta activity in some cells, especially in the transformed cells with reduced RII expression.