Protein extracts derived from bone can initiate the process that begins with cartilage formation and ends in de novo bone formation. The critical components of this extract, termed bone morphogenetic protein (BMP), that direct cartilage and bone formation as well as the constitutive elements supplied by the animal during this process have long remained unclear. Amino acid sequence has been derived from a highly purified preparation of BMP from bovine bone. Now, human complementary DNA clones corresponding to three polypeptides present in this BMP preparation have been isolated, and expression of the recombinant human proteins have been obtained. Each of the three (BMP-1, BMP-2A, and BMP-3) appears to be independently capable of inducing the formation of cartilage in vivo. Two of the encoded proteins (BMP-2A and BMP-3) are new members of the TGF-beta supergene family, while the third, BMP-1, appears to be a novel regulatory molecule.