Fibrosis, and in particular tubulointerstitial fibrosis, is a common feature of almost all chronic renal diseases. Over the past several years, significant progress has been made in defining the underlying mechanisms of tubulointerstitial fibrosis. In a variety of mouse models, expression of transforming growth factor-beta is a primary causative factor which leads to increased numbers of myofibroblasts, collagen deposition and loss of tubular epithelia. More recently, another member of the transforming growth factor-beta superfamily, BMP7, was shown to counteract transforming growth factor-beta-mediated fibrosis. The activities of these secreted factors are regulated, in part, by extracellular ligand binding proteins which can enhance or suppress receptor ligand interactions.