The transforming growth factor beta (TGF-beta) receptor, ALK-1, is expressed specifically on endothelial cells and is essential for angiogenesis, as demonstrated by its targeted deletion in mice and its mutation in the human disease hereditary hemorrhagic telangiectasia. Although ALK-1 and another endothelial-specific TGF-beta receptor, endoglin, both bind TGF-beta with identical isoform specificity and form a complex together, neither has been shown to signal in response to TGF-beta, and the mechanism by which these receptors signal in endothelial cells remains unknown. Here we report the identification of the nuclear receptor liver X receptor beta (LXRbeta) as a modulator/mediator of ALK-1 signaling. The cytoplasmic domain of ALK-1 specifically binds to LXRbeta in vitro and in vivo. Expression of activated ALK-1 results in translocation of LXRbeta from the nuclear compartment to the cytoplasmic compartment. The interaction of activated ALK-1 with LXRbeta in the cytoplasmic compartment results in the specific phosphorylation of LXRbeta by ALK-1, primarily on serine residues. LXRbeta subsequently modulates signaling by ALK-1 and the closely related TGF-beta receptor, ALK-2, as demonstrated by specific and potent inhibition of ALK-1- and ALK-2-mediated transcriptional responses, establishing LXRbeta as a potential modulator/mediator of ALK-1/ALK-2 signaling.