Bone morphogenetic proteins (BMPs) are signaling molecules that act locally on target cells to affect cell survival, proliferation, and differentiation. While first identified as bone-inducing agents, BMPs are now known to affect the formation and function of many organ systems. Here we focus only on the roles of BMPs in the skeleton. In the developing mouse embryo, BMPs direct skeletal patterning, chondrogenesis, and bone formation. In postnatal animals, BMPs are potent bone regeneration factors, affecting both the amount of new bone formed and the rate at which bone healing occurs. The amount of BMP available for signaling is tightly regulated in both the embryo and postnatally, and in the context of the skeleton, several structurally distinct BMP ligand antagonists have been shown to alter the ability of BMPs to bind to their receptors, blocking BMP activity in physiologically important circumstances. For example, noggin knockout mice display cartilage hyperplasia during skeletal development that results in the loss of joint formation (too much BMP activity), while mice that overexpress noggin in skeletal cells display severe osteopenia and bone fragility (too little BMP activity). Sclerostin, chordin, CTGF, follistatin, and gremlin are additional BMP antagonists that may act in the skeleton to regulate BMP availability. Another class of BMP inhibitors are the proteins that bind to BMP receptors but have no inherent signaling function and thus act as BMP receptor antagonists. To date, inhibin and BMP-3 have been identified as BMP receptor antagonists that can block BMP signaling in bone. Identification of BMP antagonists allows us to investigate their role in diseases that affect skeletal function, such as osteopenia and nonunion fracture, and may provide a novel therapeutic intervention point for treatment.