Idiopathic pulmonary fibrosis (IPF) (histopathology of usual interstitial pneumonia, UIP) and non-specific interstitial pneumonia (NSIP) are diseases characterized by loss of normal lung architecture and function. The differential diagnosis between IPF/UIP and NSIP may be difficult. The levels of bone morphogenetic protein (BMP)-4 antagonist gremlin are up-regulated in IPF/UIP. The present study was performed to clarify whether the localization or the mRNA expression of gremlin or BMP-4 could be used in the differential diagnosis or assessment of severity of IPF/UIP and NSIP. Gremlin and BMP-4 immunoreactivities were quantitated from 24 UIP and 12 NSIP lung specimens. Quantitative real-time polymerase chain reaction analyses were performed to compare gremlin and BMP-4 expression between UIP (n = 8) and NSIP (n = 5) biopsies. Immunohistochemical positivity and mRNA levels were correlated to lung function parameters. In IPF/UIP biopsies, gremlin was detected mainly in the thickened lung parenchyma, whereas in NSIP it was observed in the alveolar epithelium. BMP-4-positive (BMP-4+) cells were detected solely in the alveolar wall. The percentage of gremlin-positive area was higher in IPF/UIP (5.1 +/- 0.6) than in NSIP (1.8 +/- 0.7) (n = 36, p < 0.0001). Gremlin mRNA levels were higher in advanced UIP (p = 0.008) and NSIP (p = 0.007) biopsies than in the normal control lung. A negative correlation was found between the specific diffusion capacity corrected for alveolar volume (DLCO/VA) and gremlin mRNA levels (r = - 0.69, p = 0.007). The highest numbers of BMP-4+ cells were found in NSIP biopsies. BMP-4 mRNA levels correlated positively with forced vital capacity (r = 0.801, p < 0.0001) and diffusion capacity. Parenchymal gremlin immunoreactivity is thus suggestive of a UIP-type interstitial pneumonia. Gremlin expression levels correlating negatively and BMP-4 levels positively with disease severity support recent observations of a fibroprotective role for the BMPs.