Functional inactivation of divergent bone morphogenetic proteins (BMPs) causes discrete disturbances during mouse development. BMP4-deficient embryos display mesodermal patterning defects at early post-implantation stages, whereas loss of BMP7 selectively disrupts kidney and eye morphogenesis. Whether these distinct phenotypes simply reflect differences in expression domains, or alternatively intrinsic differences in the signaling properties of these ligands remains unknown. To address this issue, we created embryos exclusively expressing BMP4 under control of the BMP7 locus. Surprisingly, this novel knock-in allele efficiently rescues kidney development. These results demonstrate unequivocally that these structurally divergent BMP family members, sharing only minimal sequence similarity can function interchangeably to activate all the essential signaling pathways for growth and morphogenesis of the kidney. Thus, we conclude that partially overlapping expression patterns of BMPs serve to modulate strength of BMP signaling rather than create discrete fields of ligands with intrinsically different signaling properties.