Recent experiments in the Xenopus embryo suggest that proper regulation of BMP-4 signaling is critical to the dorsal ventral specification of both mesoderm and ectoderm. Regulation of BMP-4 signaling is known to occur extracellularly by direct binding with chordin, noggin, and follistatin, and intracellularly through the antagonistic signal interaction with dorsalizing TGF-beta family member activin. However, tight repressional regulation of BMP transcription may also be required to sustain the dorsal and neural status of the induced cells. Here we demonstrate that the dominant negative mutant of the BMP receptor (DN-BR) or the BMP-4 antagonizers, chordin and noggin, negatively regulate BMP-4 transcription in animal cap explants. We suggest that repression of BMP-4 transcription is important in the maintenance of dorsal fate and that continuous input of BMP-4 signaling is required to sustain the expression of BMP-4 transcription in the maintenance of epidermal/ventral fate. Consistent with this postulation, we found that the promoter region of the isolated BMP-4 genomic DNA includes several consensus binding sites for transcriptional regulators functioning under BMP-4 signaling such as GATA binding and ventralizing homeobox genes. In a functional assay we found that the GATA binding and ventral homeobox proteins can positively modulate BMP-4 promoter activity. We also observed that DN-BR decreases BMP-4 promoter activity. This was likely due to a repression of the above-mentioned transcription factors. The significance of these observations to embryonic patterning is discussed.