Pulmonary hypertension (PH) is a common complication of chronic hypoxic lung diseases. Recently we reported that gremlin, a BMP antagonist, was selectively upregulated in hypoxic human pulmonary microvascular endothelial cells in vitro. Given the important role of bone morphogenetic proteins (BMP) in normal pulmonary vascular homeostasis, we postulated that upregulation of gremlin was an important pathogenetic mechanism contributing to the development of hypoxic PH. To examine BMP signalling in an in vivo mouse model of hypoxic PH, mice (male SPF C57BL/6) were exposed to environmental hypoxia (FiO2 0.10) and killed under anesthesia (sodium pentobarbitone, i.p.) for RNA or protein analysis. We demonstrated selective upregulation of gremlin in the hypoxic lung by RT-PCR (n=8) and immunohistochemistry (n=5). The gremlin target proteins BMP-2, -4 and -7 were basally expressed in the mouse lung (n=8) but hypoxia only caused upregulation of BMP-2 mRNA. However, BMP-2 protein was down-regulated in hypoxia (n=6), together with reduced Smad1/5/8 phosphorylation (n=6) and reduced expression of the BMP target gene, Id1 (n=8). Recombinant gremlin blocked BMP-2-stimulated wound healing in cultured human microvascular endothelial cells and also blocked BMP-2-induced Smad1/5/8 phosphorylation and Id1 expression in these cells. Conditioned medium from hypoxic endothelial cells also blocked BMP signalling and BMP stimulated endothelial wound healing. Finally, gremlin protein was upregulated in the pulmonary vascular endothelium of patients with IPAH (n=4) when compared with controls (n=4) as demonstrated by immunohistochemistry on lung sections. These findings demonstrate lung-selective upregulation of gremlin in pulmonary hypertension and suggest an autocrine role for gremlin in modifying BMP-induced endothelial responses. Gremlin may represent a previously unrecognized mechanism that plays an important role in the development of PH.