The bone morphogenetic proteins (BMPs) belong to the transforming growth factor P superfamily of growth and differentiation factors and have been characterized by their ability to induce new bone formation in ectopic (non-skeletal) sites. BMPs are secreted molecules and are key regulators in early embryogenesis and organogenesis. One of the many functions of BMPs is to induce cartilage, bone, and connective tissue formation in vertebrates. This osteo-inductive capacity of BMPs has long been considered very promising for applications in bone repair, in the treatment of skeletal diseases, and in oral applications such as dentiogenesis and cementogenesis during regeneration of periodontal wounds. We discuss here biological roles of the BMPs in the organism and their signaling cascades leading to bone and cartilage formation in particular. It is also the aim of this review to evaluate the potential and the problems of BMPs in skeletal tissue engineering for the regeneration of bone damaged by disease or trauma and to serve as therapeutic agents for periodontal defects.