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Gremlin-1, a bone morphogenetic protein (BMP) antagonist, is overexpressed in various cancerous tissues but its role in carcinogenesis has not been established. Here, we report that gremlin-1 binds various cancer cell lines and this interaction is inhibited by our newly developed gremlin-1 antibody, GRE1. Gremlin-1 binding to cancer cells was unaffected by the presence of BMP-2, BMP-4, and BMP-7. In addition, the binding was independent of vascular endothelial growth factor receptor-2 (VEGFR2) expression on the cell surface. Addition of gremlin-1 to A549 cells induced a fibroblast-like morphology and decreased E-cadherin expression. In a scratch wound healing assay, A549 cells incubated with gremlin-1 or transfected with gremlin-1 showed increased migration, which was inhibited in the presence of the GRE1 antibody. Gremlin-1 transfected A549 cells also exhibited increased invasiveness as well as an increased growth rate. These effects were also inhibited by the addition of the GRE1 antibody. In conclusion, this study demonstrates that gremlin-1 directly interacts with cancer cells in a BMP- and VEGFR2-independent manner and can induce cell migration, invasion, and proliferation.