The bone morphogenetic proteins (BMPs) are a group of related proteins capable of inducing the formation of new cartilage and bone. We report here a direct comparison of members of the BMP family in their capability to induce DNA synthesis in bone cell cultures. The promotion of DNA synthesis was determined in periosteal cells and epiphyseal and sternal chondrocytes of embryonic chick. We demonstrate that structurally homologous BMP-2 and BMP-4 exhibit the highest specific activity in the three tested cell types, whereas BMP-5, BMP-6 activity is moderately reduced in periosteal cells and highly reduced in epiphyseal and sternal chondrocytes. The specific activity of BMP-7 is the lowest in the three tested cell cultures. Receptor binding characteristics demonstrate a binding of BMP-2 with high affinity (KD = 0.45 nM) on periosteal cells, and excess of TGF-beta 1 does not displace BMP-4 binding. Chemical cross-linking with iodinated BMP-2 generates an affinity complex of 90 kDa. These findings suggest the presence of a BMP-2/BMP-4 receptor that discriminates subtle differences in function among homologous members of the BMP family.