Action range of BMP is defined by its N-terminal basic amino acid core.

During early development, cells receive positional information from neighboring cells to form tissue patterns in initially uniform germ layers. Ligands of the transforming growth factor (TGF-beta) superfamily are known to participate in this pattern formation. In particular, activin has been shown to act as a long-range dorsalizing signal to establish a concentration gradient in Xenopus. In contrast, BMP-2 and BMP-4, other members of the family, appear to influence and induce ventral fates only where they are expressed. This raises a question as to how the action of BMPs is tightly restricted to the region within and around the cells that produce them. Here, we have demonstrated that a basic core of only three amino acids in the N-terminal region of BMP-4 is required for its restriction to the non-neural ectoderm as its expression domain. Our results also suggest that heparan sulfate proteoglycans bind to this basic core and thus play a role in trapping BMP-4. The present study is the first to identify the critical domain of BMP that is responsible for its interaction with the extracellular environment that restricts its diffusion in vivo.