Bone morphogenetic protein 3B (BMP3B) is a member of the TGF-beta superfamily. The BMP3B promoter sequence was previously identified as a target for aberrant DNA methylation in non-small-cell lung cancer (NSCLC). Aberrant DNA hypermethylation in the BMP3B promoter is associated with downregulation of BMP3B transcription in both primary human lung cancers as well as lung cancer cell lines. In order to understand the mechanisms of BMP3B silencing in lung cancer, a sample set of 91 primary NSCLCs was used to detect aberrant BMP3B promoter methylation, mutations in the coding sequence of BMP3B, and loss of heterozygosity (LOH). Our results showed that 45 of 91 (or 49.5%) tested primary NSCLCs exhibited increased promoter methylation, and 40% demonstrated LOH in at least one of the flanking microsatellite markers sJRH and D10S196 (63 kb upstream or 3.338 Mbp downstream of BMP3B). The lung cancer cell line A549, a type II alveolar epithelial human lung cancer cell line, is characterized by aberrant DNA promoter methylation. We used retroviral vector constructs containing the BMP3B cDNA to re-express the gene in A549 cells and to investigate the effects on cell growth. No change in the cell growth rate was observed after BMP3B re-expression, as compared to the vector controls. Although the number of colonies formed in anchorage-dependent assays was only slightly decreased, the colony-forming ability of A549 cells after BMP3B expression in anchorage-independent assays in soft agar was significantly reduced to 10% (P<0.005, t-test). Moreover, the in vivo tumorigenicity assay in nude mice indicated that cells re-expressing BMP3B grew significantly slower than cells not expressing BMP3B (P<0.05, t-test). In conclusion, this study provides evidence that BMP3B expression is repressed by different mechanisms in lung cancer, and that the silencing of BMP3B promotes lung tumor development.