Glioblastomas are the most prevalent and lethal primary brain tumor and are comprised of hierarchies with selfrenewing cancer stem cells (CSCs) at the apex. Like neural stem cells (NSCs), CSCs reside in functional niches that provide essential cues to maintain the cellular hierarchy. Bone morphogenetic proteins (BMPs) instruct NSCs to adopt an astrocyte fate and are proposed as anti-CSC therapies to induce differentiation, but, paradoxically, tumors express high levels of BMPs. Here we demonstrate that the BMP antagonist Gremlin1 is specifically expressed by CSCs as protection from endogenous BMPs. Gremlin1 colocalizes with CSCs in vitro and in vivo. Furthermore, Gremlin1 blocks prodifferentiation effects of BMPs, and overexpression of Gremlin1 in non-CSCs decreases their endogenous BMP signaling to promote stem-like features. Consequently, Gremlin1-overexpressing cells display increased growth and tumor formation abilities. Targeting Gremlin1 in CSCs results in impaired growth and self-renewal. Transcriptional profiling demonstrated that Gremlin1 effects were associated with inhibition of p21WAF1/CIP1, a key CSC signaling node. This study establishes CSC-derived Gremlin1 as a driving force in maintaining glioblastoma tumor proliferation and glioblastoma hierarchies through the modulation of endogenous prodifferentiation signals. © 2014 Yan et al.