Since the discovery of bone morphogenetic proteins (BMPs) as pluripotent cytokines extractable from bone matrix it has been speculated how targeting of BMPs to the extracellular matrix (ECM) modulates their bioavailability. Understanding these processes is crucial for elucidating pathomechanisms of connective tissue disorders characterized by ECM deficiency and growth factor dysregulation. Here, we provide evidence for a new BMP targeting and sequestration mechanism which is controlled by the ECM molecule fibrillin-1. We present the nanoscale structure of the BMP-7 prodomain-growth factor complex using electron microscopy, small angle X-ray scattering, and circular dichroism spectroscopy showing that it assumes an open V-like structure when it is bioactive. However, upon binding to fibrillin-1 the BMP-7 complex is rendered into a closed ring-shape, which also confers latency to the growth factor as demonstrated by bioactivity measurements. BMP-7 prodomain variants were used to map the critical epitopes for prodomain-growth factor and prodomain-prodomain binding. Together these data show that upon prodomain binding to fibrillin-1 the BMP-7 complex undergoes a conformational change which denies access of BMP receptors to the growth factor.