Bone Morphogenetic Protein (BMP) refers to an activity derived from bone that induces the formation of cartilage and bone in vivo. This activity leads to a series of developmental processes including chemotaxis, proliferation, and differentiation, which result in the transient formation of cartilage and the production of living bone tissue, complete with hematopoietic marrow. The determination of the factor or factors responsible for this activity has clear significance both for our understanding of bone biology and for the clinical application of cartilage and bone replacement. Several newly discovered factors, BMP-1, BMP-2 (BMP-2A), BMP-3 (osteogenin), BMP-4 (BMP-2B), BMP-5, BMP-6, BMP-7, and osteoinductive factor (OIF) have been implicated in the BMP process. BMP-2 through BMP-7 are all in the TGF-beta superfamily of molecules, and are closely related to two factors (Vg1 and dpp) which are involved in a variety of developmental processes during embryogenesis. A recently discovered factor, OIF, exhibits BMP activity only in the presence of TGF-beta. BMP-2, expressed as a recombinant protein, is the only molecule described to data that has been shown to clearly induce by itself the entire cartilage and bone formation process seen with bone-derived BMP. Evidence is accumulating that the BMP effect is a result of the combined actions of a set of BMP-2-like molecules. Definitive examination of the activities of the other factors will require expression of the recombinant proteins and testing of these in vivo alone and in combinations.