Bone morphogenetic proteins (BMP) are members of the TGFbeta superfamily of secreted factors with important regulatory functions during embryogenesis. We have isolated the zebrafish gene, nma, that encodes a protein with high sequence similarity to human NMA and Xenopus Bambi. It is also similar to TGFbeta type I serine/theronine kinase receptors in the extracellular ligand-binding domain but lacks a cytoplasmic kinase domain. During development, nma expression is similar to that of bmp2b and bmp4, and analysis in the dorsalized and ventralized zebrafish mutants swirl and chordino indicates that nma is regulated by BMP signaling. Overexpression of nma during zebrafish and Xenopus development resulted in phenotypes that appear to be based on inhibition of BMP signaling. Biochemically, NMA can associate with TGFbeta type II receptors and bind to TGFbeta ligand. We propose that nma is a BMP-regulated gene whose function is to attenuate BMP signaling during development through interactions with type II receptors and ligands.