A cDNA clone encoding a protein homologous to human bone morphogenetic protein 1 (huBMP1) was isolated from a sea urchin embryo cDNA library. This sea urchin gene, named suBMP, encodes a protein of M(r) of 72 x 10(3). The deduced amino acid sequence of suBMP shares 72% sequence similarity (55% identity) with that of huBMP1. Like huBMP1 it also contains an N-terminal metalloendoprotease domain that shares sequence similarity with the astacin protease from crayfish, a C-terminal domain that is similar to the repeat domain found in C1r or C1s serine proteases, and an EGF-like segment. Although suBMP mRNA was detectable at a low level in the unfertilized egg, maximal expression of mRNA was observed at hatched blastula stage, with only a modest decrease in level at later stages of development. In situ hybridization studies revealed that suBMP mRNA is found in both ectodermal and primary mesenchyme cells in hatched blastula-stage embryos. Maximal expression of suBMP was observed at mesenchyme blastula, just before the onset of primitive skeleton (spicule) formation. SuBMP was found by immunoelectronmicroscopy in all cell types in late gastrula stage embryos. The antibody gold particles appeared in small clusters in the cytoplasm, on the surface of the cells and within the blastocoel. This distribution of suBMP, coupled with the finding that it was associated with membranes but was released by sodium carbonate treatment, suggests that the protein is secreted, and subsequently associates with a cell surface component. Two models for the possible function of suBMP in spiculogenesis in the sea urchin embryo are discussed.