Development of the vertebrate skeleton, a complex biological event that includes diverse processes Such as formation of mesen-chymal condensations at the sites of future skeletal elements, osteoblast and chondrocyte differentiation, and three dimensional patterning, is regulated by many growth factors. Bone morphogenetic proteins (BMPs), members of the TGF-beta superfamily, play a pivotal role in the signaling network and are involved in nearly all processes associated with skeletal morphogenesis. BMP signals are transduced from the plasma membrane receptors to the nucleus through both Smad pathway and non-Smad pathways, and regulated by many extracellular and intercellular proteins that interact with BMPs or components of the BMP signaling pathways. To gain a better understanding of the molecular mechanisms underlying the role of BNIP in early skeletal development, it is necessary to elucidate the BMP signaling transduction pathways in chondrocytes and osteoblasts. The major objective of this review was to summarize BMP signaling pathways in the context of cranofacial, axial, and limb development. In particular, this discourse will focus on recent advances of the role of different ligands, receptors, Smads, and BMP regulators in osteoblast and chondrocyte differentiation during embryonic development. (C) 2004 Elsevier Inc. All rights reserved.