The epigenetic signals that regulate lineage development in the embryonic mammalian brain are poorly understood. Here we demonstrate that a specific subclass of the transforming growth factor beta superfamily, the bone morphogenetic proteins (BMPs), cause the selective, dose-dependent elaboration of the astroglial lineage from murine embryonic subventricular zone (SVZ) multipotent progenitor cells. The astroglial inductive effect is characterized by enhanced morphological complexity and expression of glial fibrillary acidic protein, with concurrent suppression of neuronal and oligodendroglial cell fates. SVZ progenitor cells express transcripts for the appropriate BMP-specific type I and II receptor subunits and selective BMP ligands, suggesting the presence of paracrine or autocrine developmental signaling pathways (or both). These observations suggest that the BMPs have a selective role in determining the cell fate of SVZ multipotent progenitor cells or their more developmentally restricted progeny.