This page on MSDN lists standard DateTime format strings, uncluding strings using the 'Z'.
Update: you will need to make sure that the rest of the date string follows the correct pattern as well (you have not supplied an example of what you send it, so it's hard to say whether you did or not). For the UTC format to work it should look like this:
// yyyy'-'MM'-'dd HH':'mm':'ss'Z'
DateTime utcTime = DateTime.Parse("2009-05-07 08:17:25Z");