The mandibular processes are specified as at least two independent functional regions: two large lateral regions where morphogenesis is dependent on fibroblast growth factor (FGF)-8 signaling, and a small medial region where morphogenesis is independent of FGF-8 signaling. To gain insight into signaling pathways that may be involved in morphogenesis of the medial region, we have examined the roles of pathways regulated by FGFs and bone morphogenetic proteins (BMPs) in morphogenesis of the medial and lateral regions of the developing chick mandible. Our results show that, unlike in the lateral region, the proliferation and growth of the mesenchyme in the medial region is dependent on signals derived from the overlying epithelium. We also show that medial and lateral mandibular mesenchyme respond differently to exogenous FGFs and BMPs. FGF-2 and FGF-4 can mimic many of the effects of mandibular epithelium from the medial region, including supporting the expression of Msx genes, outgrowth of the mandibular processes and elongation of Meckel's cartilage. On the other hand, laterally placed FGF beads did not induce ectopic expression of Msx genes and did not affect the growth of the mandibular processes. These functional studies, together with our tissue distribution studies, suggest that FGF-mediated signaling (other than FGF-8), through interactions with FGF receptor-2 and downstream target genes including Msx genes, is part of the signaling pathway that mediates the growth-promoting interactions in the medial region of the developing mandible. Our observations also suggest that BMPs play multiple stage- and region-specific roles in mandibular morphogenesis. In this study, we show that exogenous BMP-7 applied to the lateral region at early stages of development (stage 20) caused apoptosis, ectopic expression of Msx genes, and inhibited outgrowth of the mandibular processes and the formation of Meckel's cartilage. Our additional experiments suggest that the differences between the effects of BMP-7 on lateral mandibular mesenchyme at stage 20 and previously reported results at stage 23 (Wang et al.,  Dev. Dyn. 216:320–335) are related to differences in stages of differentiation in that BMP-7 promotes apoptosis in undifferentiated lateral mandibular mesenchyme, whereas it promotes chondrogenesis at later stages of development. We also showed that, unlike mandibular epithelium and medially placed FGF beads, medially placed BMP-7 did not support outgrowth of the isolated mesenchyme and at stage 20 induced the formation of a duplicated rod of cartilage extending from the body of Meckel's cartilage. These observations suggest that BMPs do not play essential roles in growth-promoting interactions in the medial region of the developing mandible. However, BMP-mediated signaling is a part of the signaling pathways regulating chondrogenesis of the mandibular mesenchyme. © 2002 Wiley-Liss, Inc.