The temporal and spatial transcription patterns of the Xenopus laevis Bone morphogenetic protein 2 (BMP-2) gene have been investigated. Unlike the closely related BMP-4 gene, the BMP-2 gene is strongly transcribed during oogenesis. Besides some enrichment within the animal half, maternal BMP-2 transcripts are ubiquitously distributed in the early cleavage stage embryos but rapidly decline during gastrulation. Zygotic transcription of this gene starts during early neurulation and transcripts are subsequently localized to neural crest cells, olfactory placodes, pineal body and heart anlage. Microinjection of BMP-2 RNA into the two dorsal blastomeres of 4-cell stage embryos leads to ventralization of developing embryos. This coincides with a decrease of transcripts from dorsal marker genes (beta-tubulin, alpha-actin) but not from ventral marker genes (alpha-globin). BMP-2 overexpression inhibits transcription of the early response gene XFD-1, a fork head/HNF-3 related transcription factor expressed in the dorsal lip, but stimulates transcription of the posterior/ventral marker gene Xhox3, a member of the helix-turn-helix family. Activin A incubated animal caps from BMP-2 RNA injected embryos show transcription of ventral but an inhibition of dorsal marker genes; thus, BMP-2 overrides the dorsalizing activity of activin A. The results demonstrate that BMP-2 overexpression exerts very similar effects as have previously been described for BMP-4, and they suggest that BMP-2 may act already as a maternal factor in ventral mesoderm formation.