In this study, the effect of growth differentiation factor-5 (GDF-5) on the growth and differentiation of porcine dental papilla- and follicle-derived cells was investigated. Furthermore, the effect was compared with that of BMP-2. Recombinant mouse GDF-5 (rmGDF-5) enhanced alkaline phosphatase (ALP) activity in dental papilla-derived cells in a dose-dependent manner, while ALP activity in dental follicle-derived cells was reduced. In rmGDF-5 stimulated dental papilla-derived cells, the expressions of odontoblast-marker genes were up-regulated. Conversely, recombinant human BMP-2 (rhBMP-2) enhanced ALP activity dose-dependently in both dental papilla- and follicle-derived cells. When combined, GDF-5 did not further enhance BMP-2-induced ALP activities. Rather, GDF-5 reduced BMP-2-induced ALP activities in both dental papilla- and follicle-derived cells. This suggests that affinity of GDF-5 to the shared receptors may be higher than that of BMP-2 in both cell types. These observations indicate that GDF-5 regulates differentiation of both dental papilla and follicle during odontogenesis, co-operatively with other growth factors such as BMP-2.