Bone Morphogenetic Proteins (BMPs) play an important role during organ development and during regeneration after tissue damage. BMPs signal via transmembrane serine/threonine kinase receptors. From our current understanding heteromeric complexes of type I and type II receptors are required for signal propagation. Presently, three type I and three type II receptors are known to bind BMPs with different affinities. Ligands and receptors eventually oligomerize via defined modes into signaling complexes. Co-receptors recruit into these complexes to either inhibit or to promote signaling. The Smad pathway, initiated by phosphorylation through the activated type I receptors, results in transcriptional regulation of early target genes. However, on its way to the nucleus, Smads represent signaling platforms for other pathways, which eventually finetune BMP signal transduction. We also describe BMP-induced signaling cascades leading to cytoskeletal rearrangements, non-transcriptional and non-Smad pathways. BMPs induce a plethora of different cellular effects ranging from stem cell maintenance, migration, differentiation, proliferation to apoptosis. The molecular mechanism, by which the same ligand induces these manifold effects, depends on the cellular context. Here we try to give a current picture of the most important players in regulating and directing BMP signaling towards the desired cellular outcome. Examples of BMP action during development, but also physiological and pathophysiological conditions in the adult organism are presented.