Bone morphogenetic protein-4 (BMP-4) is one of a member of related polypeptides that are important in bone formation and other developmental processes. We isolated the BMP-4 gene from a mouse genomic library and characterized the exon-intron structure and one of the candidate promoters. Two alternative 5'-noncoding exons, 1A and 1B, were identified by reverse transcription polymerase chain reaction assays. Quantitative competitive polymerase chain reaction using Exon 1A, Exon 1B, and Exon 3 primers indicate the 1A-containing transcript is the primary BMP-4 mRNA expressed in bone cell cultures. Primer extension analysis supports that 1A is the major promoter utilized in bone cell cultures as well as in 9.5-day mouse embryos. 1A promoter activity indicate selective DNA regions functional in bone cells. We found potential regulatory response regions in the 1A 5'-flanking region of the BMP-4 gene for the chicken ovalbumin upstream-transcription factor I (COUP-TFI). Specific binding to the COUP-TFI response regions in the BMP-4 1A promoter was demonstrated. By co-transfection of a COUP-TFI expression plasmid with the BMP-4 1A promoter in fetal rat calvarial osteoblasts, we demonstrated that COUP-TFI inhibits the BMP-4 promoter activity. This suggests that COUP-TFI could act as a silencer for BMP-4 transcription in vivo.