Bone morphogenetic proteins (BMP) are extracellular signaling molecules that belong to the transforming growth factor β (TGFβ) superfamily. Bone morphogenetic proteins have diverse roles during development where they regulate proliferation, differentiation, and apoptosis in many different cell types by modulating the transcription of specific target genes. BMPs have also been implicated in both promotion and inhibition of cancer progression. We have recently shown that BMP4 is commonly expressed in breast cancer but its functional significance has not been previously explored. Our data demonstrate that in all nine breast cancer cell lines studied, BMP4 treatment leads to a dramatic growth suppression as a result of the induction of G1 arrest of the cell cycle. At the same time, BMP4 stimulates cell migration and invasion in a subset of these breast cancer cell lines. The BMP4-induced phenotypic changes were mediated through the activation of the canonical SMAD signaling pathway whereas no activation of MAP-kinases ERK1/2 or p38 was detected. Our results thus implicate that BMP4 is an important regulator of key phenotypic characteristics of cancer cells, cell growth, cell migration, and invasion, and that, similar to TGFβ, it possesses both tumor suppressive and oncogenic properties in breast cancer.