Chronic hypoxia gives rise to structural remodeling of the pulmonary vasculature and is the most common underlying cause of pulmonary hypertension (PH) in humans. Recent studies in patients with familial primary PH suggest that the bone morphogenetic protein (BMP) signaling pathway may be involved in regulating pulmonary vascular remodeling. To explore this further, we have characterized the expression of BMP receptors and their ligands in a murine model of hypoxic PH. The BMP type I and II receptors, Alk3 and BMPR-II, are expressed in pulmonary endothelial cells and vascular smooth muscle cells (VSMCs), while one of their ligands, BMP4, is expressed in endothelial cells and airway epithelia, and is selectively up-regulated following prolonged exposure to hypoxia in vivo. To explore the functional role of BMP4 in hypoxic PH, we exposed wild-type mice and Bmp4 heterozygous null mutant littermates to 10% hypoxia for 3 weeks. There was a marked increase in right ventricular systolic pressure and hypertrophy in wild-type mice that had been exposed to hypoxia, both of which were significantly attenuated in Bmp4 mutants, and were associated with a marked reduction in hypoxia-induced medial wall thickening, peripheral muscularization, and VSMC proliferation. These findings were unexpected as previous in vitro studies have suggested that BMPs inhibit the growth of cultured VSMCs, suggesting that a reduction in BMP ligand expression would inhibit rather than promote VSMC proliferation. However, the VSMC phenotype is sensitive to cell culture conditions and can switch from a well-differentiated, contractile phenotype to a proliferative, synthetic phenotype with repeated passage. To investigate this further, we determined the effects of BMP4 on freshly isolated murine pulmonary artery smooth muscle cell cultures at different passages. There was a dose-dependent increase in thymidine incorporation following treatment with BMP4 that was only observed at early passage. This mitogenic effect was specific for BMP4 as the same cells were growth-inhibited following treatment with another BMP ligand, BMP7. These findings suggest that BMP4 may have direct, proliferative effects on VSMCs in the context of an intact pulmonary vascular tree in vivo. Based on these observations, we propose a model in which endothelial BMP4 secretion plays a direct, paracrine role in regulating pulmonary VSMC proliferation and remodeling in chronic hypoxia.