Sirenomelia or mermaid-like phenotype is one of the principal human congenital malformations that can be traced back to the stage of gastrulation. Sirenomelia is characterized by the fusion of the two hindlimbs into a single one. In the mouse, sirens have been observed in crosses between specific strains and as the consequence of mutations that increase retinoic acid levels. We report that the loss of bone morphogenetic protein 7 (Bmp7) in combination with a half dose or complete loss of twisted gastrulation (Tsg) causes sirenomelia in the mouse. Tsg is a Bmp- and chordin-binding protein that has multiple effects on Bmp metabolism in the extracellular space; Bmp7 is one of many Bmps and is shown here to bind to Tsg. In Xenopus, co-injection of Tsg and Bmp7 morpholino oligonucleotides (MO) has a synergistic effect, greatly inhibiting formation of ventral mesoderm and ventral fin tissue. In the mouse, molecular marker studies indicate that the sirenomelia phenotype is associated with a defect in the formation of ventroposterior mesoderm. These experiments demonstrate that dorsoventral patterning of the mouse posterior mesoderm is regulated by Bmp signaling, as is the case in other vertebrates. Sirens result from a fusion of the hindlimb buds caused by a defect in the formation of ventral mesoderm.