Bone morphogenetic proteins (BMPs) are members of the transforming growth factor beta (TGF-beta) superfamily of ligands, which regulate many mammalian physiologic and pathophysiologic processes. BMPs exert their effects through type I and type II serine/threonine kinase receptors and the Smad intracellular signaling pathway. Recently, the glycosylphosphatidylinositol (GPI)-anchored protein DRAGON was identified as a co-receptor for BMP signaling. Here, we investigate whether a homologue of DRAGON, repulsive guidance molecule (RGMa), is similarly involved in the BMP signaling pathway. We show that RGMa enhances BMP, but not TGF-beta, signals in a ligand-dependent manner in cell culture. The soluble extracellular domain of RGMa fused to human Fc (RGMa.Fc) forms a complex with BMP type I receptors and binds directly and selectively to radiolabeled BMP-2 and BMP-4. RGMa mediates BMP signaling through the classical BMP signaling pathway involving Smad1, 5, and 8, and it up-regulates endogenous inhibitor of differentiation (Id1) protein, an important downstream target of BMP signals. Finally, we demonstrate that BMP signaling occurs in neurons that express RGMa in vivo. These data are consistent with a role for RGMa as a BMP co-receptor.