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Our expression studies of bone morphogenetic proteins (BMPs) and Noggin (a BMP antagonist) in the embryonic chicken face suggested that BMP signals were important for closure of the upper lip or primary palate. We noted that Noggin expression was restricted to the frontonasal mass epithelium but was reduced at the corners of the frontonasal mass (globular processes) just prior to fusion with the adjacent maxillary prominences. We therefore performed gain- and loss-of-function experiments to determine the role of BMPs in lip formation. Noggin treatment led to reduced proliferation and outgrowth of the frontonasal mass and maxillary prominences and ultimately to the deletion of the maxillary and palatine bones. The temporary block in BMP signalling in the mesenchyme also promoted epithelial survival. Noggin treatment also upregulated expression of endogenous BMPs, therefore we investigated whether increasing BMP levels would lead to the same phenotype. A BMP2 bead was implanted into the globular process and a similar phenotype to that produced by Noggin resulted. However, instead of a decrease in proliferation, defects were caused by increased programmed cell death, first in the epithelium and then in the mesenchyme. Programmed cell death was induced primarily in the lateral frontonasal mass with very little cell death medial to the bead. The asymmetric cell death pattern was correlated with a rapid induction of Noggin in the same embryos, with transcripts complementary to the regions with increased cell death. We have demonstrated a requirement for endogenous BMP in the proliferation of facial mesenchyme and that mesenchymal signals promote either survival or thinning of the epithelium. We furthermore demonstrated in vivo that BMP homeostasis is regulated by increasing expression of ligand or antagonist and that such mechanisms may help to protect the embryo from changes in growth factor levels during development or after exposure to teratogens.