The bone morphogenetic proteins, BMP-2 and OP-1, are candidates for growth factors that control renal branching morphogenesis. We examined their effects in embryonic kidney explants and in the mIMCD-3 cell model of collecting duct morphogenesis (mIMCD-3 cells are derived from the terminal inner medullary collecting duct of the SV40 mouse). Osteogenic protein-1 (OP-1), at a dose of 0.25 nM, increased explant growth by 30% (P = 0.001). In contrast, 100-fold greater concentrations of OP-1 (28 nM) decreased explant growth by 10% (P < 0.001). BMP-2 was entirely inhibitory (maximum inhibition of 7% at 5 nM,P < 0.0004). In an in vitro model for branching morphogenesis utilizing the kidney epithelial cell line, mIMCD-3, low doses of OP-1 (<0.5 nM) increased the number of tubular structures formed by 28 ± 5% (P = 0.01), whereas concentrations >0.5 nM decreased that number by 22 ± 8% (P = 0.02). All concentrations of BMP-2 (0.05–10 nM) were inhibitory (maximum inhibition at 10 nM of 88 ± 3%, P < 0.0001). Stimulatory doses of OP-1 increased tubular length (P = 0.003) and the number of branch points/structure (3.2-fold increase, P= 0.0005) compared with BMP-2. To determine the molecular basis for these effects, we demonstrated that BMP-2 is bound to mIMCD-3 cells by the type I serine/threonine kinase receptor, ALK-3, and that OP-1 bound to an ∼80-kDa protein using ligand-receptor affinity assays. To demonstrate that OP-1 can exert both stimulatory and inhibitory effects within a developing kidney, embryonic explants were treated with agarose beads saturated with 2 μM OP-1. OP-1 decreased the number of ureteric bud/collecting duct branches adjacent to the beads by 58 ± 1% (P < 0.0001). In contrast, the number of branches in tissue distal to the OP-1 beads was enhanced, suggesting a stimulatory effect at lower doses of OP-1. We conclude that OP-1 and BMP-2 directly control branching morphogenesis and that the effects of OP-1 are dependent on its local concentration within developing kidney tissue.