BACKGROUND: Constitutive Wnt activation is essential for colorectal cancer (CRC) initiation but also underlies the cancer stem cell phenotype, metastasis and chemosensitivity. Importantly Wnt activity is still modulated as evidenced by higher Wnt activity at the invasive front of clonal tumours termed the β-catenin paradox. SMAD4 and p53 mutation status and the bone morphogenetic protein (BMP) pathway are known to affect Wnt activity. The combination of SMAD4 loss, p53 mutations and BMP signalling may integrate to influence Wnt signalling and explain the β-catenin paradox. METHODS: We analysed the expression patterns of SMAD4, p53 and β-catenin at the invasive front of CRCs using immunohistochemistry. We activated BMP signalling in CRC cells in vitro and measured BMP/Wnt activity using luciferase reporters. MTT assays were performed to study the effect of BMP signalling on CRC chemosensitivity. RESULTS: Eighty-four percent of CRCs with high nuclear β-catenin staining are SMAD4 negative and/or p53 aberrant. BMP signalling inhibits Wnt signalling in CRC only when p53 and SMAD4 are unaffected. In the absence of SMAD4, BMP signalling activates Wnt signalling. When p53 is lost or mutated, BMP signalling no longer influences Wnt signalling. The cytotoxic effects of 5-FU are influenced in a similar manner. CONCLUSIONS: The BMP signalling pathway differentially modulates Wnt signalling dependent on the SMAD4 and p53 status. The use of BMPs in cancer therapy, as has been proposed by previous studies, should be targeted to individual cancers based on the mutational status of p53 and SMAD4.