The neuronal adhesion protein Dragon acts as a bone morphogenetic protein (BMP) coreceptor that enhances BMP signaling. Given the importance of BMP signaling in nephrogenesis and its putative role in the response to injury in the adult kidney, we studied the localization and function of Dragon in the kidney. We observed that Dragon localized predominantly to the apical surfaces of tubular epithelial cells in the thick ascending limbs, distal convoluted tubules, and collecting ducts of mice. Dragon expression was weak in the proximal tubules and glomeruli. In mouse inner medullary collecting duct (mIMCD3) cells, Dragon generated BMP signals in a ligand-dependent manner, and BMP4 is the predominant endogenous ligand for the Dragon coreceptor. In mIMCD3 cells, BMP4 normally signaled through BMPRII, but Dragon enhanced its signaling through the BMP type II receptor ActRIIA. Dragon and BMP4 increased transepithelial resistance (TER) through the Smad1/5/8 pathway. In epithelial cells isolated from the proximal tubule and intercalated cells of collecting ducts, we observed coexpression of ActRIIA, Dragon, and BMP4 but not BMPRII. Taken together, these results suggest that Dragon may enhance BMP signaling in renal tubular epithelial cells and maintain normal renal physiology.