Bone Morphogenetic Protein (BMP) signaling mediated by the receptor Wishful thinking (Wit) is essential for nervous system development in Drosophila. Mutants lacking wit function show defects in neuromuscular junction development and function, specification of neurosecretory phenotypes, and eclosion behavior that result in lethality. The ligand is Glass bottom boat, the Drosophila ortholog of mammalian BMP-7, which acts as a retrograde signal through the Wit receptor. In order to identify transcriptional targets of the BMP pathway in the Drosophila nervous system, we have analyzed the gene expression profile of wit mutant larval central nervous system. Genes differentially expressed identified by microarray analysis have been verified by quantitative PCR and studied by in situ hybridization. Among the genes thus identified, we find solute transporters, neuropeptides, mitochondrial proteins, and novel genes. In addition, several genes are regulated by wit in an isoform-specific manner that suggest regulation of alternative splicing by BMP signaling.