BMP3 and TGF beta 1 were found to induce opposite effects on human bone marrow stromal cells both in cell proliferation and cell differentiation and on calcium deposition onto the extracellular matrix. Moreover, BMP3 may exert, in part, the inhibitory effect of TGF beta 1 through decreasing the affinity of TGF-beta for its receptors which are now identified in these human bone cells. (C) 1997 Academic Press.