Abstract Introduction Rheumatoid arthritis is a chronic systemic autoimmune disease affecting peripheral joints and leading to loss of joint function. The severity and outcome of disease are dependent on the balance between inflammatory/destructive and homeostatic or repair pathways. Increasing evidence suggests a role for bone morphogenetic protein (BMP) signaling in joint homeostasis and disease. Methods Activation of BMP signaling in collagen-induced arthritis as a model of rheumatoid arthritis was studied by immunohistochemistry and Western blot for phosphorylated SMAD1/5 at different time points. Expression of different BMP ligands and noggin, a BMP antagonist, was determined on synovium and cartilage extracts of arthritic knees, at different time points, with quantitative polymerase chain reaction. At the protein level, BMP2 and BMP7 were studied with immunohistochemistry. Finally, the effect of anti-tumor necrosis factor-alpha (TNFα) treatment on the expression of BMP2, BMP7, and growth and differentiation factor-5 (GDF5) in synovium and cartilage of arthritic knees was investigated. Results A time-dependent activation of the BMP signaling pathway in collagen-induced arthritis was demonstrated with a dynamic and characteristic expression pattern of different BMP subfamily members in synovium and cartilage of arthritic knees. As severity increases, the activation of BMP signaling becomes more prominent in the invasive pannus tissue. BMP2 is present in cartilage and the hyperplastic lining layer. BMP7 is found in the sublining zone and inflammatory infiltrate. Treatment with etanercept slowed down progression of disease, but no change in expression of GDF5, BMP2, and BMP7 in synovium was found; in the cartilage, however, blocking of TNFα increased the expression of BMP7. Conclusions BMP signaling is dynamically activated in collagen-induced arthritis and is partly TNFα-independent. TNFα blocking increased the expression of BMP7 in the articular cartilage, possibly enhancing anabolic mechanisms. Different types of source and target cells are recognized. These data further support a role for BMP signaling in arthritis.