Different reports have suggested the dependence of bone morphogenetic protein (BMP) activity on the sulfated glycosaminoglycan (GAG) chains found in proteoglycans. However, the requirement of sulfated molecules in early BMP-2-signaling responses has not been established. We have used sodium chlorate to inhibit sulfation in C2C12 cells and have analyzed BMP-2 induction of Id1. We show here that sulfation inhibition strongly decreases the specific and early induction of Id1 at the transcriptional level. This effect is not reverted by the addition of extracellular components, such as GAGs or extracellular matrix (ECM). The inhibition of GAG incorporation into proteoglycans, or their removal by GAG lyases, does not mimic the negative effect on Id1 expression, while sulfation inhibition also represses the Id1-induction exerted by a constitutively active form of the BMP receptor, suggesting that BMP-2-mediated Id1 induction has an intracellular requirement for sulfated molecules. (c) 2006 Elsevier Inc. All rights reserved.