Methods are described wherein the skin of a vertebrate, or the skin or hair of a mammal can be lightened by administration of an agent, e.g., protein, peptide, active fusion protein, active fragment, or molecular mimic, that binds to BMP-4 transmembrane receptors on melanocytes and decreases the level of melanin synthesis. Also described are methods to identify molecules that mimic the function of BMP-4 in causing a decrease in melanin in melanocytes.