Activins and bone morphogenetic proteins (BMPs) elicit diverse biological responses by signaling through two pairs of structurally related types I and II receptors. Here, we summarize recent advances in understanding the mode of action of activins and BMPs, focusing on our elucidation of the crystal structure of BMP-7 in complex with the extracellular domain (ECD) of the activin type II receptor and our identification of a binding site for activin on the type I receptor ALK4. As a consequence of the broad range of activities of activins and BMPs, it is perhaps not surprising that additional mechanisms are continually being discovered through which a cell’s responsiveness to these ligands is modulated. In this review, we describe novel ways in which the two extracellular cofactors, betaglycan and Cripto, regulate BMP and/or activin signal transduction.