Accumulating evidence suggests that a subpopulation of breast cancer cells, referred to as cancer stem cells (CSCs), have the ability to propagate a tumor and potentially seed new metastases. Furthermore, stimulation of an epithelial-to-mesenchymal transition by factors like transforming growth factor-β (TGFβ) is accompanied with the generation of breast CSCs. Previous observations indicated that bone morphogenetic protein-7 (BMP7) antagonizes the protumorigenic and prometastatic actions of TGFβ, but whether BMP7 action is mechanistically linked to breast CSCs has remained elusive. Here, we have studied the effects of BMP7, BMP2 and a BMP2/7 heterodimer on the formation of human breast CSCs (ALDH(hi)/CD44(hi)/CD24(-/low)) and bone metastases formation in a preclinical model of intra-cardiac injection of MDA-MB-231 cells in athymic nude (Balb/c nu/nu) mice. The BMP2/7 heterodimer was the most efficient stimulator of BMP signaling and very effectively reduced TGFβ-driven Smad signaling and cancer cell invasiveness. The tested BMPs-particularly the heterodimeric BMP2/7-strongly reduced the size of the ALDH(hi)/CD44(hi)/CD24(-/low) CSC subpopulation. In keeping with these in vitro observations, pretreatment of cancer cells with BMPs for 72 h prior to systemic inoculation of the cancer cells inhibited the formation of bone metastases. Collectively, our data support the notion that breast CSCs are involved in bone metastasis formation and describe heterodimeric BMP2/7 as a powerful TGFβ antagonist with anti-metastatic potency.