Members of the bone morphogenetic protein (BMP) family of growth factors are present in the central nervous system during development and throughout life. They are known to play an important regulatory role in cell differentiation, but their function in postmitotic telencephalic neurons has not been investigated. To address this question, we examined cultured hippocampal neurons following treatment with bone morphogenetic protein-7 (BMP-7, also referred to as osteogenic protein-1). When added at the time of plating, BMP-7 markedly stimulated the rate of dendritic development. Within 1 day, the dendritic length of BMP-7-treated neurons was more than twice that of controls. By three days the dendritic arbors of BMP-7-treated neurons had attained a level of branching similar to that of 2-week-old neurons cultured under standard conditions. Several findings indicate that BMP-7 selectively enhances dendritic development. While dendritic length was significantly increased in BMP-7-treated neurons, the length of the axon was not. In addition, the mRNA encoding the dendritic protein MAP2 was significantly increased by BMP-7 treatment, but the mRNA for tubulin was not. Finally, BMP-7 did not enhance cell survival. Because dendritic maturation is a rate-limiting step in synapse formation in hippocampal cultures, we examined whether BMP-7 accelerated the rate at which neurons became receptive to innervation. Using two separate experimental paradigms, we found that the rate of synapse formation (assessed by counting synapsin I-positive presynaptic vesicle clusters) was increased significantly in neurons that had been exposed previously to BMP-7. Because BMP-7 and related BMPs are expressed in the hippocampus in situ, these factors may play a role in regulating dendritic branching and synapse formation in both development and plasticity.