cDNAs encoding a mouse gene closely related to human bone morphogenetic protein-1 (BMP-1) have been isolated from an 8.5-day p.c. embryo cDNA library. Analysis of the predicted amino acid sequence shows that the protein contains a putative zinc-binding astacin metalloendopeptidase domain, five Clr/s domains, and two potential Ca(2+)-binding EGF-like repeats. In overall domain organization it more closely resembles the Drosophila tolloid gene product than human BMP-1. By RNase protection, transcripts can be detected in the embryo at 6.5 days p.c. and persist at least until 16.5 days p.c. By in situ hybridization, transcripts are seen at high levels in the maternal deciduum and in the late-gastrulation stage embryo at low levels throughout the mesoderm. This low level of mesodermal expression continues through development but somewhat higher levels are seen in developing membranous and endochondral bone, in the submucosa of the intestine, the dermis of the skin, and the mesenchyme of the spleen and lung. High levels of BMP-1 transcripts are also seen from 9.5 days p.c. in the floorplate region of the developing neural tube. Potential therefore exists for the interaction of BMP-1 protein with products of TGF-beta-related genes expressed during embryogenesis.