We describe here the cloning and characterization of the 5' flanking region of the human Bone Morphogenetic Protein-7 (BMP-7) gene from a 3.3 kb genomic DNA fragment. Functional analysis by transient transfection using the luciferase reporter gene indicated that this region had a low basal promoter activity in human Wilm's tumor derived renal (G401) and rat osteoblast (ROS 17/2.8) cell lines. Sequential deletion analysis of the promoter revealed sequences whose presence correlated with decreased expression of the reporter gene. Coexpression of transcription factors involved in epithelial/mesenchymal interactions during kidney and eye development dramatically stimulated the expression of the reporter gene from the putative BMP-7 promoter. Finally, a subset of agents that upregulated the expression of the reporter gene from the cloned promoter were also shown to increase the expression of the endogenous BMP-7 in G401 and ROS cell lines in vitro.