Background: Bone morphogenetic proteins (BMPs) transmit signals via the intracellular protein Smad1, which is phosphorylated by ligand bound receptors, translocates to the nucleus, and functions to activate BMP target genes. Recently, a subclass of Smad proteins has been shown to inhibit, rather than transduce, BMP signalling, either by binding to the intracellular domain of BMP receptors, thereby preventing phosphorylation-mediated activation of Smad1, or by binding directly to Smad1, thereby inhibiting its ability to activate gene transcription.