Regulation of decidualization is decisive for proper implantation and the establishment of pregnancy. Recent studies have suggested that several bone morphogenetic proteins (BMPs) play physiological roles in reproduction. In the present study, we examined the expression of BMP7 in the endometrium and the effect of BMP7 on decidualization and proliferation of endometrial stromal cells (ESC). The gene expression of BMP7 in endometrial tissues collected from women with regular menstrual cycles was determined and the effect of ovarian steroid hormones on BMP7 gene expression was investigated in cultured ESC. The effect of BMP7 on the decidualization of ESC was determined by measuring the gene expression and protein secretion of insulin-like growth factor binding protein 1 (IGFBP1), a marker of decidualization. The effect of BMP7 on the proliferation of ESC was examined by the bromodeoxyuridine (BrdU) incorporation assay. The gene expression of BMP7 in endometrial tissues was low at and after the mid-secretory phase of the menstrual cycle. Progesterone suppressed the gene expression of BMP7 in cultured ESC. Treatment with progesterone and estradiol for 12 days achieved decidualization of ESC, increasing the gene expression and protein secretion of IGFBP1. Addition of BMP7 protein to the culture almost completely inhibited these increases. BMP7 suppressed BrdU incorporation in ESC, which indicated an antiproliferative effect of BMP7 on ESC. Progesterone-induced suppression of BMP7 and BMP7-induced inhibition of decidualization and proliferation of ESC suggest an elaborate regulatory mechanism for decidualization through BMP7 in the endometrium.