Members of the transforming growth factor-beta (TGF-beta) superfamily signal through their cognate receptors to determine cell phenotypes during embryogenesis. Our previous studies on the regulation of first branchial arch morphogenesis have identified critical components of a hierarchy of different TGF-beta isoforms and their possible functions in regulating tooth and cartilage formation during mandibular morphogenesis. Here we tested the hypothesis that TGF-beta type II receptor (TGF-beta IIR) is a critical component in the TGF-beta signaling pathway regulating tooth formation. To establish the precise location of TGF-beta ligand and its cognate receptor, we first performed detailed analyses of the localization of both TGF-beta2 and TGF-beta IIR during initiation and subsequent morphogenesis of developing embryonic mouse tooth organs. A possible autocrine functional role for TGF-beta and its cognate receptor (TGF-beta IIR) was inferred due to the temporal and spatial localization patterns during the early inductive stages of tooth morphogenesis. Second, loss of function of TGF-beta IIR in a mandibular explant culture model resulted in the acceleration of tooth formation to the cap stage while the mandibular explants in the control group only showed bud stage tooth formation. In addition, there was a significant increase in odontogenic epithelial cell proliferation following TGF-beta IIR abrogation. These results demonstrate, for the first time, that abrogation of the TGF-beta IIR stimulates embryonic tooth morphogenesis in culture and reverses the negative regulation of endogenous TGF-beta signaling upon enamel organ epithelial cell proliferation.