Defects in the growth and development of the endochondral bones that comprise the cranial base contribute to several craniofacial dysmorphic syndromes. Since Bone Morphogenetic Protein (BMP) signaling regulates chondrocyte differentiation and endochondral ossification in developing long bones, we have tested the hypothesis that BMP signaling also participates in regulating development of the cranial base. During in vivo developmental progression of the cranial base in mice, a burst of skeletal growth and chondrocyte maturation was identified in the perinatal period. Using a novel serum-free organ culture system, cranial base structures were cultured as explants in the presence of BMP4 or noggin, and analyzed for morphological and molecular changes. Growth of perinatal cranial base explants was inhibited by treatment with noggin, a BMP inhibitor. Exogenous BMP4 promoted cartilage growth, matrix deposition and chondrocyte proliferation in a dose dependent manner. Correspondingly, expression level of the cartilage markers Sox9 and collagen type II were also increased. Alkaline phosphatase and collagen type X expression were up-regulated and expressed in ectopic hypertrophic chondrocytes after treatment of the cultures with 100 ng/ml BMP4 for seven days. This increase in chondrocyte hypertrophy was accompanied by increased indian hedgehog (Ihh) and parathyroid hormone/parathyroid hormone related peptide (PTH/PTHrP) receptor (PPR) expression, but not increased PTHrP expression. We conclude that endogenous BMPs are required to maintain cartilage growth, and exogenous BMP4 can enhance cartilage maturation and induce ectopic chondrocyte hypertrophy in the cranial base. Therefore, appropriate levels of BMP signaling are important for normal cranial base development.