One of the most intriguing questions confronting the bone morphogenetic protein family is the mechanism of ligand recognition, because there are more ligands than receptors. Crystal structures of two type II receptors, ActR-II and BMPR-II, are essentially identical, and a loop structure (A-loop) has been suggested to play a role in determining ligand specificity. A solution biophysical study showed mutations of several A-loop residues in these two receptors exert different ligand binding effects. Thus, the issues of mechanism of ligand recognition and specificity remain unresolved. We examined effects of mutations of residues Y40, G47, and S107 in BMPR-II. These residues are not identified as being in contact with the ligand in the BMP-7-BMPR-II complex but are found mutated in genetic diseases. They are likely to be useful in identifying their roles in differentiating the various BMP ligands. Spectroscopic probing revealed little mutation-induced structural change in BMPR-II. Ligand binding studies revealed that Y40 plays a significant role in differentiating three distinct ligands; G47 and S107 affect ligand binding to a lesser extent. The role of the A-loop in ActR-II or BMPR-II is dependent on the host sequence of the receptor extracellular domain (ECD) in which it is embedded, suggesting a host-guest relationship between the A-loop and the rest of the ECD. Computational analysis demonstrated a long-range connectivity between Y40, G47, and S107 and other locations in BMPR-II. An integration of these results on functional energetics and protein structures clearly demonstrates, for the first time, an intradomain communication network within BMPR-II.