A neonatal rat metatarsal organ culture model has been employed to study the anabolic effects of Sonic/Indian hedgehog and BMP-4. In this culture system, a significant increase in endochondral ossification is measured by an increase in length of mineralized bone, after daily treatment for 7 days with Sonic hedgehog protein (Shh-N). Previous evidence indicated that PTH related protein (PTHrP) is a critical target of hedgehog function in endochondral ossification. Using a PTHrP blocking antibody, it is shown that hedgehog mediates this activity via pathways other than through PTHrP. A dose-related increase in endochondral ossification is observed when metatarsals are treated with 25 ng/ml recombinant human bone morphogenetic protein 4 (BMP-4). However, this activity is not evident at higher doses of BMP-4 (200 ng/ml). High doses of BMP-4 resulted in increased expression of noggin messenger RNA and cotreatment of noggin and Shh-N resulted in reversal of the anabolic action of Shh-N. This observation suggests that BMP-4 signaling can influence the Shh-N mediated increase in endochondral ossification. Finally, we show that the Shh-N and BMP-4 mediated increase in endochondral ossification is reversed by treatment with antisense oligonucleotides targeted against Cbfa1. Thus, this report identifies Shh-N as an inducer of endochondral ossification that mediates its effect via BMP-4 and Cbfa1-dependent pathways.