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From birth, the vault of the skull grows at a prodigious rate, driven by the activity of osteoblastic cells at the fibrous joints (sutures) that separate the bony calvarial plates. One in 2500 children is born with a medical condition known as craniosynostosis because of premature bony fusion of the calvarial plates and a cessation of bone growth at the sutures. Bone morphogenetic proteins (BMPs) are potent growth factors that promote bone formation. Previously, we found that Glypican-1 (GPC1) and Glypican-3 (GPC3) are expressed in cranial sutures and are decreased during premature suture fusion in children. Although glypicans are known to regulate BMP signalling, a mechanistic link between GPC1, GPC3 and BMPs and osteogenesis has not yet been investigated. We now report that human primary suture mesenchymal cells coexpress GPC1 and GPC3 on the cell surface and release them into the media. We show that they inhibit BMP2, BMP4 and BMP7 activities,which both physically interact with BMP2 and that immunoblockade of endogenous GPC1 and GPC3 potentiates BMP2 activity. In contrast, increased levels of GPC1 and GPC3 as a result of over expression or the addition of recombinant protein, inhibit BMP2 signalling and BMP2-mediated osteogenesis. We demonstrate that BMP signalling in suture mesenchymal cells is mediated by both SMAD-dependent and SMAD-independent pathways and that GPC1 and GPC3 inhibit both pathways. GPC3 inhibition of BMP2 activity is independent of attachment of the glypican on the cell surface and post-translational glycanation, and thus appears to be mediated by the core glypican protein. The discovery that GPC1 and GPC3 regulate BMP2-mediated osteogenesis,and that inhibition of endogenous GPC1 and GPC3 potentiates BMP2 responsiveness of human suture mesenchymal cells, indicates how down regulation of glypican expression could lead to the bony suture fusion that characterizes craniosynostosis.