Implantation of a blastocyst in the uterus is a multistep process tightly controlled by an intricate regulatory network of interconnected ovarian, uterine, and embryonic factors. Bone morphogenetic protein (BMP) ligands and receptors are expressed in the uterus of pregnant mice, and BMP2 has been shown to be a key regulator of implantation. In this study, we investigated the roles of the BMP type 1 receptor, activin-like kinase 2 (ALK2), during mouse pregnancy by producing mice carrying a conditional ablation of Alk2 in the uterus (Alk2 cKO mice). In the absence of ALK2, embryos demonstrate delayed invasion into the uterine epithelium and stroma, and upon implantation, stromal cells fail to undergo uterine decidualization, resulting in sterility. Mechanistically, microarray analysis revealed that CCAAT/enhancer-binding protein β (Cebpb) expression is suppressed during decidualization in Alk2 cKO females. These findings and the similar phenotypes of Cebpb cKO and Alk2 cKO mice lead to the hypothesis that BMPs act upstream of CEBPB in the stroma to regulate decidualization. To test this hypothesis, we knocked down ALK2 in human uterine stromal cells (hESC) and discovered that ablation of ALK2 alters hESC decidualization and suppresses CEBPB mRNA and protein levels. Chromatin immunoprecipitation (ChIP) analysis of decidualizing hESC confirmed that BMP signaling proteins, SMAD1/5, directly regulate expression of CEBPB by binding a distinct regulatory sequence in the 3' UTR of this gene; CEBPB, in turn, regulates the expression of progesterone receptor (PGR). Our work clarifies the conserved mechanisms through which BMPs regulate peri-implantation in rodents and primates and, for the first time, uncovers a linear pathway of BMP signaling through ALK2 to regulate CEBPB and, subsequently, PGR during decidualization.