Bone morphogenetic proteins (BMPs) have been heretofore implicated in the induction of osteoblast differentiation from uncommitted progenitors during embryonic skeletogenesis and fracture healing. We have tested the hypothesis that BMPs are also involved in the osteoblastogenesis that takes place in the bone marrow in postnatal life. To do this, we took advantage of the properties of noggin, a recently discovered protein that binds BMP-2 and -4 and blocks their action. Addition of human recombinant noggin to bone marrow cell cultures from normal adult mice inhibited both osteoblast and osteoclast formation; these effects were reversed by exogenous BMP-2. Consistent with these findings, BMP-2 and -4 and BMP-2/4 receptor transcripts and proteins were detected in these primary cultures, in a bone marrow-derived stromal/osteoblastic cell line, as well as in murine adult whole bone; noggin expression was also documented in all these preparations. Moreover, addition of antinoggin antibody caused an increase in osteoblast progenitor formation. These findings suggest that BMP-2 and -4 are expressed in the bone marrow in postnatal life and serve to maintain the continuous supply of osteoblasts and osteoclasts; and that, in fact, BMP-2/4-induced commitment to the osteoblastic lineage is a prerequisite for osteoclast development. Hence, BMPs, perhaps in balance with noggin and possibly other antagonists, may provide the tonic baseline control of the rate of bone remodeling on which other inputs (e.g., hormonal, biomechanical, etc.) operate.