Acts as an extracellular morphogen to establish at least two cellular response thresholds within the dorsal half of the drosophila embryo. Required for the proper development of the embryonic dorsal hypoderm, for viability of larvae and for cell viability of the epithelial cells in the imaginal disks. Acts together with scw (By similarity). Heterodimers of scw/dpp are the active subunit, dpp/dpp homodimers elicit a basal response and scw/scw homodimers alone are ineffective in specifying a dorsal pattern. Is internalized by receptor-mediated endocytosis. Expressed in the imaginal discs associated with establishment of the proximal-distal axis of the appendages, and midgut mesoderm. Belongs to the TGF-beta family.