Metabolic homeostasis is coordinately controlled by diverse inputs. Understanding these regulatory networks is vital to combating metabolic disorders. The nematode Caenorhabditis elegans has emerged as a powerful, genetically tractable model system for the discovery of lipid regulatory mechanisms. Here we introduce DBL-1, the C. elegans homolog of bone morphogenetic protein 2/4 (BMP2/4), as a significant regulator of lipid homeostasis. We used neutral lipid staining and a lipid droplet marker to demonstrate that both increases and decreases in DBL-1/BMP signaling result in reduced lipid stores and lipid droplet count. We find that lipid droplet size, however, correlates positively with the level of DBL-1/ BMP signaling. Regulation of lipid accumulation in the intestine occurs through non-cell-autonomous signaling, since expression of SMA-3, a Smad signal transducer, in the epidermis (hypodermis) is sufficient to rescue the loss of lipid accumulation. Finally, genetic evidence indicates that DBL-1/BMP functions upstream of Insulin/IGF-1 Signaling in lipid metabolism. We conclude that BMP signaling regulates lipid metabolism in C. elegans through interorgan signaling to the Insulin pathway, shedding light on a less well-studied regulatory mechanism for metabolic homeostasis.