During spinal cord development, distinct classes of interneurons arise at stereotypical locations along the dorsoventral axis. In this paper, we demonstrate that signaling through bone morphogenetic protein (BMP) type 1 receptors is required for the formation of two populations of commissural neurons, DI1 and DI2, that arise within the dorsal neural tube. We have generated a double knockout of both BMP type 1 receptors, Bmpr1a and Bmpr1b, in the neural tube. These double knockout mice demonstrate a complete loss of D1 progenitor cells, as evidenced by loss of Math1 expression, and the subsequent failure to form differentiated DI1 interneurons. Furthermore, the DI2 interneuron population is profoundly reduced. The loss of these populations of cells results in a dorsal shift of the dorsal cell populations, DI3 and DI4. Other dorsal interneuron populations, DI5 and DI6, and ventral neurons appear unaffected by the loss of BMP signaling. The Bmpr double knockout animals demonstrate a reduction in the expression of Wnt and Id family members, suggesting that BMP signaling regulates expression of these factors in spinal cord development. These results provide genetic evidence that BMP signaling is crucial for the development of dorsal neuronal cell types.