Non-alcoholic fatty liver disease (NAFLD) affects over 30% of adults in the United States. Bone morphogenetic protein (BMP) signaling is known to contribute to hepatic fibrosis, but the role of BMP signaling in the development of NAFLD is unclear. In this study, treatment with either of two BMP inhibitors reduced hepatic triglyceride content in diabetic (db/db) mice. BMP inhibitor-induced decrease in hepatic triglyceride levels was associated with decreased mRNA encoding Dgat2, an enzyme integral to triglyceride synthesis. Treatment of hepatoma cells with BMP2 induced DGAT2 expression and activity via intracellular SMAD signaling. In humans we identified a rare missense single nucleotide polymorphism in the BMP type 1 receptor ALK6 (rs34970181;R371Q) associated with a 2.1-fold increase in the prevalence of NAFLD. In vitro analyses revealed R371Q:ALK6 is a previously unknown constitutively active receptor. These data show that BMP signaling is an important determinant of NAFLD in a murine model and is associated with NAFLD in humans.