Epithelial-mesenchymal interactions play an important role in the development of many different organs and tissues. The secretory glands of the male reproductive system, including the prostate and seminal vesicles, are derived from epithelial precursors. Signals from the underlying mesenchyme are required for normal growth, branching, and differentiation of the seminal vesicle epithelium. Here, we show that a member of the BMP family, Gdf7, is required for normal seminal vesicle development. Expression and tissue recombination experiments suggest that Gdf7 is a mesenchymal signal that acts in a paracrine fashion to control the differentiation of the seminal vesicle epithelium.