Bone morphogenetic protein-4 (BMP-4) is a member of the BMP family, which consists of important regulators of bone formation and embryonic development. We have previously isolated the human BMP-4 encoding gene, which is associated with the heritable disorder Fibrodysplasia Ossificans Progressiva. In this study, we describe the molecular cloning and functional characterization of two promoters involved in the transcriptional regulation of the human BMP-4 gene, one upstream of exon 1, the second located in intron 1, upstream of exon 2. These two promoters give rise to different transcripts in a cell type- and differentiation-dependent manner. Mutational analysis showed cell type-specific regulation of both promoter activities. Gel mobility shift assays indicated the presence of cell type-specific transcription factor binding sites in promoter 1. In addition, evidence was found for a novel BMP-4 transcript. Since various human diseases can be linked directly to aberrant expression of BMP genes, the present findings are of great importance in attempts to develop strategies for therapeutic interference with such diseases.