Astrogliosis following spinal cord injury (SCI) involves an early hypertrophic response that is beneficial and a subsequent formation of a dense scar. We investigated the role of bone morphogenetic protein (BMP) signaling in gliosis after SCI and find that BMPR1a and BMPR1b signaling exerts opposing effects on hypertrophy. Conditional ablation of BMPR1a from glial fibrillary acidic protein (GFAP)-expressing cells leads to defective astrocytic hypertrophy, increased infiltration by inflammatory cells, and reduced axon density. BMPR1b-null mice conversely develop “hyperactive” reactive astrocytes and consequently have smaller lesion volumes. The effects of ablation of either receptor are reversed in the double knock-out animals. These findings indicate that BMPR1a and BMPR1b exert directly opposing effects on the initial reactive astrocytic hypertrophy. Also, BMPR1b knock-out mice have an attenuated glial scar in the chronic stages following injury, suggesting that it has a greater role in glial scar progression. To elucidate the differing roles of the two receptors in astrocytes, we examined the effects of ablation of either receptor in serum-derived astrocytes in vitro. We find that the two receptors exert opposing effects on the posttranscriptional regulation of astrocytic microRNA-21. Further, overexpression of microRNA-21 in wild-type serum-derived astrocytes causes a dramatic reduction in cell size accompanied by reduction in GFAP levels. Hence, regulation of microRNA-21 by BMP signaling provides a novel mechanism for regulation of astrocytic size. Targeting specific BMPR subunits for therapeutic purposes may thus provide an approach for manipulating gliosis and enhancing functional outcomes after SCI.