Bone morphogenetic protein-1 (BMP-1), a metalloprotease isolated from osteogenic extracts of demineralized bone, is capable of cleaving the C-propeptides of procollagen types I, II, and III. A single mammalian gene produces alternatively spliced RNA transcripts for BMP-1 and for a second longer protein, designated mammalian tolloid (mTld) due to a domain structure identical to that of the Drosophila dorsal-ventral patterning gene product tolloid (Tld). Here we report the use of a cDNA library, prepared from BMP-1/mTld-null mouse embryos, to isolate cDNA clones for a novel mammalian protein with a domain structure identical to that of mTld. The new protein, designated mammalian tolloid-like (mTll), has 76% identity with mTld for amino acid residues in all domains downstream of, and including, the protease domain. In contrast, the N-terminal activation domains of the two proteins show little similarity. In situ hybridizations show the distribution of mTll RNA to overlap extensively that previously shown for the BMP-1 and mTld RNA forms. However, mTll shows additional strong expression in structures of the developing, neonatal, and adult brain in which expression of BMP-1 and mTld has not been observed. The murine mTll gene (Tll) is mapped to central chromosome 8, which is a different chromosomal location than that of the BMP-1/mTld gene. Loci for some developmental abnormalities map to the same general chromosomal location as Tll.