While new roles for the adult skeleton as an endocrine organ continue to emerge, our understanding of how bone homeostasis is maintained is also changing. Here we focus on BMP2, a molecule identified by its ability to induce bone formation at extraskeletal sites. We detail specific roles for BMP2 in the adult skeleton, where it acts to regulate the differentiation of periosteal skeletal progenitors during fracture healing and also mediates osteoblast formation in the bone marrow microenvironment. We highlight two areas of BMP2 biology that deserve further study: the specific signaling pathways used by BMP2 to affect bone formation, and the factors that regulate BMP2 production in the adult skeleton. These activities serve to distinguish BMP2 from other members of the TGF-b/BMP/Activin gene superfamily