Abstract Diffuse intrinsic pontine glioma (DIPG) is a rare and incurable pediatric brain cancer with survival of less than one year. Understanding the tumorigenesis mechanisms of DIPG and identifying potential therapeutic strategy are major research foci in the DIPG field. The most lethal subtype of diffuse intrinsic pontine glioma (DIPG) is the H3K27M subtype. Although ACVR1 mutations have been implicated in the pathogenesis of this presently incurable disease, the impacts of BMP signaling on more than 60% of H3K27M DIPG carrying ACVR1 wild-type remain unknown. Here, we show that BMP ligands exert potent tumor suppressive effects against H3.3 K27M and ACVR1 WT DIPG in a SMAD-dependent manner. Specifically, clinical data revealed that many DIPG tumors have exploited CHRDL1’s capacity to hijack BMP ligands. We discovered activation of BMP signaling promotes the exit of DIPG tumor cells from “prolonged-stem-cell-like” state to differentiation by epigenetically regulating CXXC5, which acts as a tumor suppressor and positive regulator of BMP signaling. Beyond showing how BMP signaling impacts DIPG, our study also identified potent anti-tumor efficacy of Dacinostat for DIPG. Thus, our study delineates context-dependent features of BMP signaling pathway in DIPG subtype.