Bone morphogenetic proteins (BMPs) regulate many processes in the embryo, including cell type specification, patterning, apoptosis, and epithelial-mesenchymal interaction. They also act in soft and hard tissues in adult life. Their signals are transduced from the plasma membrane to the nucleus through a limited number of Smad proteins. The list of Smad-interacting proteins is however growing and it is clear that these partners determine the outcome of the signal. We summarize the present status in BMP/Smad signaling, with emphasis on recently identified Smad partners and how these proteins may cooperate in the regulation of the expression of BMP target genes.