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The receptor system and the molecular mechanisms by which inhibin acts on its target cells are poorly understood, in contrast to the situation for the structurally related molecule, activin. On the basis of evidence that the biological action of inhibin in a number of systems resembles that of an activin antagonist, it has been contended that inhibin operates by competition for the activin receptor rather than through a specific inhibin receptor. However, mounting evidence indicates that inhibin also interacts with high affinity and specificity with membrane-binding proteins that are likely to be the putative inhibin receptor.