Bone morphogenetic protein-4 (BMP4), a member of the transforming growth factor-beta (TGF-beta) family, regulates several developmental processes during animal development. We have now studied the effects of BMP-4 in the metanephric kidney differentiation by using organ culture technique. Human recombinant BMP-4 diminishes the number of ureteric branches and changes the branching pattern. Our data suggest that BMP-4 affects the ureteric branching indirectly via interfering with the differentiation of the nephrogenic mesenchyme. The clear positional preference of the defects to posterior mesenchyme might reflect an early anterior-posterior patterning of the metanephric mesenchyme. The smooth muscle alpha-actin expressing cell population around the ureteric stalk, highly expressing Bmp-4 mRNA, is also expanded in kidneys treated with BMP-4. Thus, BMP-4 may be a physiological regulator of the development of the periureteric smooth muscle layer and ureteric elongation.