Podocyte injury has been proposed to play an important role in diabetic nephropathy; however, its pathological mechanism remains unclear. We have shown that bone morphogenetic protein 4 (BMP4) signaling leads to the glomerular changes characteristic of this disorder. To analyze the molecular mechanism of podocyte injury, the effect of BMP4 was investigated using streptozotocin (STZ)-induced, Bmp4 heterozygous knockout (Bmp4+/-) and podocyte-specific Bmp4 knockout mice. Mice with STZ-induced diabetes exhibited glomerular matrix hyperplasia and decreased numbers of podocyte nucleus-specific WT1-positive cells. The number of podocytes and proteinuria were improved in both diabetic Bmp4 knockout mouse models compared to the effects observed in the control mice. The effect of BMP4 overexpression on Bmp4-induced or podocyte-specific transgenic mice was examined. Tamoxifen-induced Bmp4-overexpressing mice exhibited mesangial matrix expansion and decreased numbers of WT1-positive cells. Podocyte-specific Bmp4-overexpressing mice displayed increased kidney BMP4 expression and mesangial matrix expansion but decreased nephrin expression and numbers of WT1-positive cells. Both lines of Bmp4-overexpressing mice exhibited increased albuminuria. In cultured podocytes, BMP4 increased phospho-p38 levels. BMP4 decreased nephrin expression but increased cleaved caspase-3 levels. p38 suppression inhibited caspase-3 activation. Apoptosis was confirmed in STZ-diabetic glomeruli and Bmp4-overexpressing mice. Bmp4 +/- mice with diabetes displayed reduced apoptosis. Based on these data, the BMP4 signaling pathway plays important roles in the development of both podocyte injury and mesangial matrix expansion in diabetic nephropathy.