Bone morphogenetic proteins (BMPs), a subgroup of the transforming growth factor-beta (TGF-β) superfamily, were originally isolated from bone on the basis of their ability to induce ectopic bone development. Although BMPs are involved in a wide range of developmental and physiological functions, very few vertebrate target genes in this pathway have been identified. To identify target genes regulated by the BMP growth factor family in Xenopus, large-scale microarray analyses were conducted to discover genes directly activated by this factor in dissociated animal cap tissues treated with a combination of the protein synthesis inhibitor cycloheximide and BMP2. Consequent expression patterns and behaviors of the most highly induced genes were analyzed by in situ and reverse transcriptase-polymerase chain reaction analyses. Here, we describe two sets of the most highly induced direct BMP target genes identified using microarrays prepared from two different stages of early Xenopus development. A wide variety of genes are induced by BMP2, ranging from cell cycle controllers, enzymes, signal transduction cascade components, and components of the blood and vascular system. The finding reinforces the notion that BMP signals play important roles in a variety of biological processes. Developmental Dynamics 232:445–456, 2005. © 2004 Wiley-Liss, Inc.