Cerebellar granule neurons, the most abundant class of CNS neurons, have a critical role in cerebellar function. Granule neurons are generated at the dorsal border of the mesencephalon and metencephalon, the rhombic lip. In the mouse embryo, rhombic lip cells express a number of granule neuron markers, notably the bHLH transcription factor Math1. Dorsal midline cells adjacent to the rhombic lip express Bmp6, Bmp7 and Gdf7, three genes encoding peptide growth factors of the bone morphogenetic protein (BMP) family. These BMPs induced the expression of granule neuron markers in cultured neural tissue. Moreover, BMP-treated neural cells formed mature granule neurons after transplantation into the early postnatal cerebellum, suggesting that BMPs initiate the program of granule cell specification.