Bone morphogenetic protein-7 (BMP7) controls ureteric bud and collecting duct morphogenesis in a dose-dependent manner (Piscione TD, Yager TD, Gupta IR, Grinfeld B, Pei Y, Attisono L, Wrana JL, and Rosenblum ND. Am J Physiol Renal Physiol 273: F961-F975, 1997). We defined cellular and molecular mechanisms underlying these effects in embryonic kidney explants and in the mIMCD-3 cell model of collecting tubule morphogenesis. Low-dose (0.25 nM) BMP7 significantly increased tubule number and cell proliferation. Similar to BMP2, high-dose (10 nM) BMP7 inhibited cell proliferation and stimulated apoptosis. To define molecular mechanisms, we identified signaling events downstream of BMP7. High-dose BMP7, but not low-dose BMP7, activated Smad1 in mIMCD-3 cells. Moreover, the inhibitory effects of high-dose BMP7 and BMP2, but not the stimulatory effects of low-dose BMP7, on tubulogenesis and cell proliferation were significantly reduced in mIMCD-3 cells stably expressing Smad1(Delta458), a dominant negative mutant form of Smad1, but not in cells stably expressing wild-type Smad1. We conclude that BMP7 exerts dose-dependent effects on ureteric bud or collecting duct cell proliferation and apoptosis by signaling via Smad1-dependent and Smad1-independent pathways.