Heterotopic ossification is a frequent complication in patients who have suffered head and neck traumas or have undergone total hip replacement. In this report, stable folding variants of the natural occurring osteoinductive BMPs were shown to act as inhibitors for heterotopic ossification. The most effective BMP folding variant construct performed even better than the natural occurring BMP antagonist Noggin because it also inhibited calcium deposition of pre-osteoblastic cells. INTRODUCTION: Signal transduction through receptor and ligand binding depends on the proper folding of all partners, especially when it involves the formation of a heterotetramer. In the case, the receptor binding of the ligand can be uncoupled from signal transduction, and folding variants of a ligand can be developed into antagonists of the natural bioactivity of the ligand. Here we present a deletion mutant of a bone morphogenetic protein (BMP) folding variant capable of inhibiting the bone-inducing action of natural occurring BMPs. MATERIALS AND METHODS: Deletion mutants and site-directed mutants of BMP folding variants were generated and tested for their ability to reduce alkaline phosphatase activity and mineralization in a pre-osteoblastic cell line. In vivo activity of the optimized folding variant was determined in a heterotopic ossification model in rodents and in two Xenopus laevis model systems. Biosensor interaction analysis was used to determine the affinity of the optimized BMP folding variant to the extracellular domain of BMP receptors. RESULTS: In vitro and in vivo tests in rodents revealed that the structural elements of the wrist epitope combined with finger 2 and a positive charge proximal to the tip of this finger are sufficient to induce osteoinhibition with deletion mutants and folding variants of mature BMP-4. The inhibitor designed to suppress heterotopic ossification showed BMP antagonist activity in embryos and animal caps of X. laevis. Binding studies of the inhibitor to ectodomains of type I and type II BMP receptors revealed a concentration-dependent binding, especially to the high-affinity BMP receptor. CONCLUSIONS: Deletion mutants of BMP folding variants are a new form of BMP antagonists and act through competition with osteoinductive BMP for BMP receptor binding. The excellent in vivo performance of the optimized folding variant is because of its ability to block signaling of endogenous BMPs deposited in the extracellular matrix even more effectively than the natural occurring BMP antagonist Noggin.