Connective-tissue growth factor (CTGF) is a secreted protein implicated in multiple cellular events including angiogenesis, skeletogenesis and wound healing 1 .It is a member of the CCN family of secreted proteins, named after CTGF, cysteine-rich 61 (CYR61), and nephroblastoma overexpressed (NOV) proteins.The molecular mechanism by which CTGF or other CCN proteins regulate cell signalling is not known.CTGF contains a cysteine-rich domain (CR) similar to those found in chordin and other secreted proteins 2 , which in some cases have been reported to function as bone morphogenetic protein (BMP) and TGF-β binding domains 3-6 .Here we show that CTGF directly binds BMP4 and TGF-β1 through its CR domain.CTGF can antagonize BMP4 activity by preventing its binding to BMP receptors and has the opposite effect, enhancement of receptor binding, on TGF-β1.These results show that CTGF inhibits BMP and activates TGF-β signals by direct binding in the extracellular space.