The bone morphogenetic proteins (BMPs) constitute a large family of cytokines related to members of the transforming growth factor-beta superfamily. Recent evidence, in particular from gene targeting experiments in the mouse, indicates that BMPs are required for mesoderm formation and for the development and patterning of many different organ systems. Significant progress has also been made in understanding the role of BMPs in gastrulation and neurulation in Xenopus and in identifying genes regulating BMP expression and components of the downstream signaling pathways. Extracellular modifiers of BMP activity may constitute an opposing morphogenetic system.