Bone Morphogenetic Protein-4 (BMP-4) and Vgr-1 are members of the TGF-beta gene family most closely related to the Drosophila Decapentaplegic and Xenopus Vg-1 genes. Members of this gene family have been implicated in diverse processes during embryogenesis including epithelial-mesenchymal interactions. Here, we use in situ hybridization to localize BMP-4 and Vgr-1 transcripts during murine development. BMP-4 mRNA is found in a variety of tissues. In the 8.5 days p.c. embryo, transcripts are localized to the mesoderm posterior to the last somite. Later gestation embryos show expression in developing limbs, the embryonic heart, the facial processes and condensed mesenchymal cells associated with early whisker follicle formation. In the developing central nervous system (CNS), BMP-4 expression is restricted to the floor of the diencephalon associated with pituitary development. In contrast, Vgr-1 transcripts are found along the anteroposterior axis of the CNS, in cells immediately adjacent to the floor plate and in the roof plate extending to the forebrain. Together, the data support the hypothesis that polypeptide growth factors of the TGF-beta superfamily play key roles in the initial stages of neurogenesis and organogenesis during murine development.