The bone morphogenic proteins (BMPs) play important roles in vertebrate dev
elopment. In Xenopus, BMPs act as epidermal inducers and also as negative r
egulators of neurogenesis. Antagonism of BMP signaling results in neuraliza
tion. BMPs signal through the cell-surface receptors and downstream Smad mo
lecules. Upon stimulation with BMP, Smad1, Smad5. and Smad8 are phosphoryla
ted by the activated BMP receptors, form a complex with Smad4, and transloc
ate into the nucleus, where they regulate the expression of BMP target gene
s. Here, we show that the Ski oncoprotein can block BMP signaling and the e
xpression of BMP-responsive genes in both Xenopus and mammalian cells by di
rectly interacting with and repressing the activity of BMP-specific Smad co
mplexes. This ability to antagonize BMP signaling results in neuralization
by Ski in the Xenopus embryo and blocking of osteoblast differentiation of
murine W-20-17 cells. Thus, Ski is able to repress the activity of all rece
ptor-associated Smads and may regulate vertebrate development by modulating
the signaling activity of transforming growth factor-beta family members.