Transforming growth factor beta (TGFbeta) isoforms are known to be upregulated during the progression of some diseases. They have been shown to stimulate invasion and metastasis during carcinogenesis and promote many pathological fibrotic diseases when overstimulated. This involvement in late-stage carcinoma and pathological fibrosis makes TGFbeta isoforms prime targets for therapeutic intervention. Although soluble ectodomains of TGFbeta type II (RII) and betaglycan (BG) have been utilized as TGFbeta inhibitors, their antagonistic potency against different TGFbeta isoforms varies considerably because RII does not appreciably bind to TGFbeta2 whereas BG binds weakly to TGFbeta1 and TGFbeta3. In this study, we have successfully constructed and expressed a recombinant fusion protein containing the endoglin domain of BG (BG(E)) and the extracellular domain of RII. The fusion protein (named BG(E)RII) was purified from bacterial inclusion bodies by immobilized metal ion chromatography, refolded and characterized. It bound with higher affinity to TGFbeta1 and TGFbeta3 than a commercially available soluble RII and to TGFbeta2 than a commercially available soluble BG. More significantly, whereas BG(E) or RII alone showed no antagonistic activity towards TGFbeta2, BG(E)RII inhibited the signaling of both TGFbeta1 and TGFbeta2 in cell-based assays including TGFbeta-induced phosphorylation of Smad2 and Smad3, and transcription from a TGFbeta-responsive promoter more effectively than equimolar concentrations of either RII or BG. After further purification by gel filtration chromatography, BG(E)RII was found to have greater activity than other potent TGFbeta inhibitors in blocking the signaling of TGFbeta1 and TGFbeta3. Thus, BG(E)RII is a potent pan-TGFbeta inhibitor in vitro and has potential for blocking TGFbeta-induced pathogenesis in vivo.