TrkC, a member of the tropomyosin-related kinase (Trk) family of neurotrophin receptors, is implicated in the growth and survival of human cancer tissues. TrkC is also a potent oncoprotein expressed in tumors derived from multiple cell lineages, and functions as an active protein tyrosine kinase by neurotrophin-3 (NT-3). We previously reported that TrkC plays an essential role in tumor growth and metastasis in a murine cancer cell line. Here, we report that expression of TrkC suppresses bone morphogenetic protein 2 (BMP-2)-induced Smad1 phosphorylation and transcriptional activation. In the highly metastatic CT26 murine colon cancer cell line, which expresses endogenous TrkC, silencing TrkC expression by small interfering RNA significantly enhanced BMP-2-induced Smad1 phosphorylation and restored BMP-2 growth inhibitory activity. In contrast, expression of TrkC in RIE-1 cells, in which TrkC is not expressed, completely suppressed BMP-2 transcriptional activation. Furthermore, we showed that TrkC directly binds to the BMP type II receptor (BMPRII), thereby preventing it from interacting with the BMPRI. This activity requires a functional TrkC protein tyrosine kinase, and the BMPRII seems to be a direct target of TrkC. Our findings provide evidence for a previously unknown mechanism by which TrkC, a neuronal receptor, can block BMP tumor-suppressor activity.