The type beta transforming growth factor family is composed of a series of processed, secreted growth factors, several of which have been implicated in important regulatory roles in cell determination, inductive interactions, and tissue differentiation. Among these factors, the sequence of the DPP protein from Drosophila is most similar to two of the vertebrate bone morphogenetic proteins, BMP2 and BMP4. Here we report that the human BMP4 ligand sequences can function in lieu of DPP in Drosophila embryos. We introduced the ligand region from human BMP4 into a genomic fragment of the dpp gene in place of the Drosophila ligand sequences and recovered transgenic flies by P-element transformation. We find that this chimeric dpp-BMP4 transgene can completely rescue the embryonic dorsal-ventral patterning defect of null dpp mutant genotypes. We infer that the chimeric DPP-BMP4 protein can be processed properly and, by analogy with the action of other family members, can activate the endogenous DPP receptor to carry out the events necessary for dorsal-ventral patterning. Our evidence suggests that the DPP-BMP4 signal transduction pathway has been functionally conserved for at least 600 million years.