To evaluate the effects of retinoic acid (RA) on expression of bone morphogenetic protein 7 (BMP-7) in rat fetus with cleft palate, and the effects of RA on proliferation and apoptosis of osteoblasts. All-trans RA (ATRA) was used to induce congenital cleft palate in Wistar rat. BMP-7 mRNA expression in maxillary bone tissue of fetal rats was measured by Northern blotting analysis. Flow cytometry and MTT assay were used to measure the apoptosis and proliferation of ATRA-treated MC-3T3-E1 cells. BMP-7 mRNA and protein expressions in ATRA-treated MC-3T3-E1 cells were detected by RT-PCR and Western blotting analysis. ATRA could induce cleft palate of rat fetus. The incidence rate of cleft palate induced by 100 mg/kg ATRA (45.5%) was significantly higher than 50 mg/kg ATRA (12.5%, P < 0.05). BMP-7 mRNA expression decreased in maxillary bone tissue of rat fetus with cleft palate. MC-3T3-E1 cells proliferation treated with 1 × 10 −6 mol/L ATRA decreased by 60%, the cell apoptosis increased by 2 times. BMP-7 mRNA and protein levels in MC-3T3-E1 cells treated with 1 × 10 −6 mol/L ATRA decreased by 60% and 80%, respectively, compared with ATRA-untreated cells (P < 0.05). BMP-7 may play an important role in embryonic palate development. RA may possess the ability to down-regulate cell proliferation through regulation of BMP-7 gene expression.