The intermediate mesoderm lies between the somites and the lateral plate and is the source of all kidney tissue in the developing vertebrate embryo. While bone morphogenetic protein (Bmp) signaling is known to regulate mesodermal cell type determination along the medio-lateral axis, its role in intermediate mesoderm formation has not been well characterized. The current study finds that low and high levels of Bmp ligand are both necessary and sufficient to activate intermediate and lateral mesodermal gene expression, respectively, both in vivo and in vitro. Dose-dependent activation of intermediate and lateral mesodermal genes by Bmp signaling is cell-autonomous, as demonstrated by electroporation of the avian embryo with constitutively active Bmp receptors driven by promoters of varying strengths. In explant cultures, Bmp activation of Odd-skipped related 1 (Odd-1), the earliest known gene expressed in the intermediate mesoderm, is blocked by cyclohexamide, indicating that the activation of Odd-1 by Bmp signaling is translation-dependent. The data from this study are integrated with that of other studies to generate a model for the role of Bmp signaling in trunk mesodermal patterning in which low levels of Bmp activate intermediate mesoderm gene expression by inhibition of repressors present in medial mesoderm, whereas high levels of Bmp repress both medial and intermediate mesoderm gene expression and activate lateral plate genes.