Truncated trkB.T1 (T1) neurotrophin receptor inhibits full-length trkB.TK+ (TK+) signaling. At least two possible mechanisms have been proposed for this action: T1 could trap the ligand or function as a dominant negative receptor. To differentiate between these possibilities we have studied survival of serum-deprived PC12-trkB cells stably expressing TK+. PC12-trkB cells were observed to display constitutive trkB kinase activity which leads to survival of a cell subpopulation in the absence of added brain-derived neurotrophic factor (BDNF) and serum. Exogenous BDNF significantly increased cell survival, and this increase was inhibited by BDNF neutralizing antibody. The antibody treatment had no effect on the constitutive TK+ activity. Transfected T1 completely inhibited survival by BDNF or constitutive trkB kinase activity in PC12-trkB cells similarly to tyrosine kinase inhibitor K252a. In addition, T1 coimmunoprecipitated with TK+ and inhibited its autophosphorylation by BDNF. These data suggest that truncated T1 inhibits TK+ signaling by dominant negative action.