Bone morphogenetic protein (Bmp) signaling is crucial for the formation and patterning of zebrafish ventral and posterior mesoderm. Mutants defective in the Bmp pathway have expanded trunk muscle, abnormal tails and severely impaired development of ventral mesodermal derivatives such as vasculature, blood and pronephros. As Bmps continue to be expressed in the ventral and posterior mesoderm after gastrulation, it is likely that Bmp signaling continues to play an important developmental role during outgrowth of the posterior body. However, because Bmp signaling plays an essential role during the gastrula stages, it has not been possible with mutants or standard disruption techniques to determine the later functions of the Bmp pathway. To study the role of Bmp signaling in the ventral and posterior mesoderm during trunk and tail outgrowth, we generated a transgenic zebrafish line containing a heatshock-inducible dominant-negative Bmp receptor-GFP fusion. Our data show that Bmps are important for tail organizer formation and for patterning the ventral mesoderm during early gastrulation. However, from mid-gastrulation to the early somitogenesis stages, Bmp signaling is important for ventral tail fin development and for preventing secondary tail formation. We conclude that the role of Bmp signaling in the ventral and posterior mesoderm changes as gastrulation proceeds.