The importance of morphogenetic proteins (BMPs) and their antagonists in vascular development is increasingly being recognized. BMP-4 is essential for angiogenesis and is antagonized by matrix Gla protein (MGP) and crossveinless 2 (CV2), both induced by the activin receptor like-kinase 1 (ALK1) when stimulated by BMP-9. In this study, however, we show that CV2 preferentially binds and inhibits BMP-9 thereby providing strong feedback inhibition for BMP-9/ALK1 signaling rather than for BMP-4/ALK2 signaling. CV2 disrupts complex formation involving ALK2, ALK1, BMP-4, and BMP-9 required for the induction of both BMP antagonists. It also limits VEGF expression, proliferation, and tube formation in ALK1-expressing endothelial cells. In vivo, CV2 deficiency translates into a dysregulation of vascular BMP signaling, resulting in an abnormal endothelium with increased endothelial cellularity and expression of lineage markers for mature endothelial cells. Thus, mutual regulation by BMP-9 and CV2 is essential in regulating the development of the vascular endothelium.