Impaired glucose-stimulated insulin secretion (GSIS) and perturbed proinsulin processing are hallmarks of beta cell dysfunction in type 2 diabetes. Signals that can preserve and/or enhance beta cell function are therefore of great therapeutic interest. Here we show that bone morphogenetic protein 4 (Bmp4) and its high-affinity receptor, Bmpr1a, are expressed in beta cells. Mice with attenuated BMPR1A signaling in beta cells show decreased expression of key genes involved in insulin gene expression, proinsulin processing, glucose sensing, secretion stimulus coupling, incretin signaling, and insulin exocytosis and develop diabetes due to impaired insulin secretion. We also show that transgenic expression of Bmp4 in beta cells enhances GSIS and glucose clearance and that systemic administration of BMP4 protein to adult mice significantly stimulates GSIS and ameliorates glucose tolerance in a mouse model of glucose intolerance. Thus, BMP4-BMPR1A signaling in beta cells plays a key role in GSIS.