A complementary DNA coding for a second type of activin receptor (ActRIIB) has been cloned from Xenopus laevis that fulfills the structural criteria of a transmembrane protein serine kinase. Ectodermal explants from embryos injected with activin receptor RNA show increased sensitivity to activin, as measured by the induction of muscle actin RNA. In addition, injected embryos display developmental defects characterized by inappropriate formation of dorsal mesodermal tissue. These results demonstrate that this receptor is involved in signal transduction and are consistent with the proposed role of activin in the induction and patterning of mesoderm in Xenopus embryos.