We have purified and characterized recombinant Xenopus bone morphogenetic proteins (xBMPs): homodimers of xBMP-4, 7 and heterodimers (xBMP-4/7) produced by a baculovirus expression system. Highly purified xBMPs had homogeneous NH2-termini predicted from a consensus motif, Arg-X-X-Arg, while they possessed diverse sugar chains. Implantation of xBMPs together with pure collagen carrier in rats induced new bone formation in a dose-dependent manner. The xBMP-4/7 heterodimer showed the strongest activity, with an effective dose of 1-30 micrograms, while more than 10 micrograms of xBMP-4 or 7 homodimer was required for a significant effect. Histological examination revealed that xBMP-4/7 implants showed intramembranous ossification without chondrogenesis. In primary cultures of rat bone marrow stromal cells, xBMP-4/7 induced alkaline phosphatase 3-fold more strongly than xBMP-7 and 20-fold more than xBMP-4. These results suggest that the heterodimeric form of BMP would generate the strongest signal triggering osteogenic differentiation of osteoprogenitor cells in adult tissues.