Bone morphogenetic protein-1 (BMP-1) is a metalloprotease purified from extracts capable of inducing ectopic bone formation. In humans, it has a domain structure similar to that of the Drosophila dorsal-ventral patterning gene-product tolloid (Tld), but is considerably shorter. Here we show that, in humans and mice, alternatively spliced transcripts encode BMP-1 and a longer protein, designated mammalian tolloid (mTld), with a domain structure identical to that of Drosophila Tld. A third alternatively spliced product, in which a novel domain is inserted near the BMP-1 C terminus, is also reported. Low levels of transcripts for mTld were found in all adult human tissues surveyed, while BMP-1 transcripts were detectable in all adult tissues except brain. This differential expression was mirrored in embryonic mouse tissues where in situ hybridization found high levels of mTld transcripts, but was unable to detect BMP-1 transcripts, in the floor plate of the neural tube of the developing central nervous system. The third alternatively spliced form was not detected in adult human tissues. In situ hybridizations found punctate signals for all three forms localized to trophoblast giant cells in 17.5-day mouse placenta, with highest levels of expression, especially for BMP-1, near the maternal interface.