Bone morphogenetic protein (BMP) signaling plays a key role in the control of skin development and postnatal remodeling by regulating keratinocyte proliferation, differentiation, and apoptosis. To study the role of BMPs in wound-induced epidermal repair, we used transgenic mice overexpressing the BMP downstream component Smad1 under the control of a K14 promoter as an in vivo model, as well as ex vivo and in vitro assays. K14-caSmad1 (transgenic mice overexpressing a constitutively active form of Smad1 under K14 promoter) mice exhibited retarded wound healing associated with significant inhibition of proliferation and increased apoptosis in healing wound epithelium. Furthermore, microarray and quantitative real-time reverse-transcriptase-PCR (qRT-PCR) analyses revealed decreased expression of a number of cytoskeletal/cell motility-associated genes including wound-associated keratins (Krt16, Krt17) and Myosin VA (Myo5a), in the epidermis of K14-caSmad1 mice versus wild-type (WT) controls during wound healing. BMP treatment significantly inhibited keratinocyte migration ex vivo, and primary keratinocytes of K14-caSmad1 mice showed retarded migration compared with WT controls. Finally, small interfering RNA (siRNA)-mediated silencing of BMPR-1B in primary mouse keratinocytes accelerated cell migration and was associated with increased expression of Krt16, Krt17, and Myo5a compared with controls. Thus, this study demonstrates that BMPs inhibit keratinocyte proliferation, cytoskeletal organization, and migration in regenerating skin epithelium during wound healing, and raises a possibility for using BMP antagonists for the management of chronic wounds.