May be involved in dorsoventral axis formation. Seems to antagonize BMP signaling by forming ternary complexes with CHRD and BMPs, thereby preventing BMPs from binding to their receptors. In addition to the anti-BMP function, also has pro-BMP activity, partly mediated by cleavage and degradation of CHRD, which releases BMPs from ternary complexes. May be an important modulator of BMP-regulated cartilage development and chondrocyte differentiation. May play a role in thymocyte development. Interacts with CHRD and/or BMP4. This interaction enhances CHRD/BMP4 complex formation. Interacts with BMP7. Expressed in lymph node, liver, kidney, and lung. Expression in the kidney was stronger in the medulla than in the cortex, particularly in the cells surrounding the medullary tubules. Expressed in growth plate cartilage of long bones, ribs, and digits and to a lesser extent also in the resting zone of the epiphysis, trabecular bone, and vertebral cartilage. Expression seems to be absent from other skeletal tissues including muscle, skin, and fibroblasts. Expressed at all embryonic stages examined. Expression was low and distribution was diffuse. At the primitive streak stage, detected in the extraembryonic region. Signal first appeared in the embryo during the neural plate stage. Stronger and more localized expression is seen after embryonic turning. Higher expression is seen in the branchial arch mesenchyme, the endoderm of the developing pharynx, all levels of the developing gut, the myotome compartment of the somites, and some regions of surface ectoderm. At 8.25 and 9.0 dpc expressed in head mesenchyme and ventral mesoderm. The N-terminal domain is sufficient to interact with BMP4. Embryonic lethality and sirenomelia were observed only in BMP null embryos in which one or two copies of TSG were also missing. When TSG and BMP7 are mutated, the siren phenotype results from the fusion of the limb buds in the ventroposterior midline owing to a paucity of posterior ventral mesoderm. Belongs to the twisted gastrulation protein family.