Bone morphogenetic protein-4 (BMP4) may be involved in the molecular switch that determines which late form of age-related macular degeneration (AMD) an individual develops. BMP4 expression is high in retinal pigment epithelium (RPE) cells in late, dry AMD patients, while BMP4 expression is low in the wet form of the disease, characterized by choroidal neovascularization (CNV). Here, we sought to determine the mechanism by which BMP4 is down-regulated in CNV. BMP4 expression was decreased within laser-induced CNV lesions in mice at a time when tumor necrosis factor (TNF) expression was high (7 d postlaser) and was reexpressed in RPE when TNF levels declined (14 d postlaser). We found that TNF, an important angiogenic stimulus, significantly down-regulates BMP4 expression in cultured human fetal RPE cells, ARPE-19 cells, and RPE cells in murine posterior eye cup explants. We identified two specificity protein 1 (Sp1) binding sites in the BMP4 promoter that are required for basal expression of BMP4 and its down-regulation by TNF. Through c-Jun NH(2)-terminal kinase (JNK) activation, TNF modulates Sp1 phosphorylation, thus decreasing its affinity to the BMP4 promoter. The down-regulation of BMP4 expression by TNF in CNV and mechanisms established might be useful for defining novel targets for AMD therapy.