TGF‐β1 binds receptor II (TβRII) to exert its biological activities but its functional importance in kidney diseases remains largely unclear. In the present study, we hypothesized that TβRII may function to initiate the downstream TGF‐β signalling and determine the diverse role of TGF‐β1 in kidney injury. The hypothesis was examined in a model of unilateral ureteral obstructive (UUO) nephropathy and in kidney fibroblasts and tubular epithelial cells in which the TβRII was deleted conditionally. We found that disruption of TβRII inhibited severe tubulointerstitial fibrosis in the UUO kidney, which was associated with the impairment of TGF‐β/Smad3 signalling, but not with the ERK/p38 MAP kinase pathway. In contrast, deletion of TβRII enhanced NF‐κB signalling and renal inflammation including up‐regulation of Il‐1β and Tnfα in the UUO kidney. Similarly, in vitro disruption of TβRII from kidney fibroblasts or tubular epithelial cells inhibited TGF‐β1‐induced Smad signalling and fibrosis but impaired the anti‐inflammatory effect of TGF‐β1 on IL‐1β‐stimulated NF‐κB activation and pro‐inflammatory cytokine expression. In conclusion, TβRII plays an important but diverse role in regulating renal fibrosis and inflammation. Impaired TGF‐β/Smad3, but not the non‐canonical TGF‐β signalling pathway, may be a key mechanism by which disruption of TβRII protects against renal fibrosis. In addition, deletion of TβRII also enhances NF‐κB signalling along with up‐regulation of renal pro‐inflammatory cytokines, which may be associated with the impairment of anti‐inflammatory properties of TGF‐β1. Copyright © 2012 Pathological Society of Great Britain and Ireland. Published by John Wiley & Sons, Ltd.