Bone morphogenetic proteins (BMPs) are derived from inactive precursor proteins by endoproteolytic cleavage. Here we show that processing of Nodal and Myc-tagged BMP4 is significantly enhanced by SPC1/Furin or SPC4/PACE4, providing direct evidence that regulation of BMP signaling is likely to be controlled by subtilisin-like proprotein convertase (SPC) activities. Nodal processing is dramatically enhanced if two residues adjacent to the precursor cleavage site are substituted with amino acids found at the equivalent positions of Activin, demonstrating that structural constraints at the precursor cleavage site limit the processing efficiency. However, in transfection assays, mature Nodal is undetectable either in culture supernatants or in cell lysates, despite efficient cleavage of the precursor protein, suggesting that mature Nodal is highly unstable. Domain swap experiments support this conclusion since mature BMP4 or Dorsalin are also destabilized when expressed in conjunction with the Nodal pro domain. By contrast, mature Nodal is stabilized by the Dorsalin pro domain, which mediates the formation of stable complexes. Collectively, these data show that the half-life of mature BMPs is greatly influenced by the identity of their pro regions.