Fibrodysplasia ossificans progressiva (FOP) is a rare genetic disease characterized by extraskeletal bone formation through endochondral ossification. FOP patients harbor point mutations in ACVR1 (also known as ALK2), a type I receptor for bone morphogenetic protein (BMP). Two mechanisms of mutated ACVR1 (FOP-ACVR1) have been proposed: ligand-independent constitutive activity and ligand-dependent hyperactivity in BMP signaling. Here, by using FOP patient-derived induced pluripotent stem cells (FOP-iPSCs), we report a third mechanism, where FOP-ACVR1 abnormally transduces BMP signaling in response to Activin-A, a molecule that normally transduces TGF-β signaling but not BMP signaling. Activin-A enhanced the chondrogenesis of induced mesenchymal stromal cells derived from FOP-iPSCs (FOP-iMSCs) via aberrant activation of BMP signaling in addition to the normal activation of TGF-β signaling in vitro, and induced endochondral ossification of FOP-iMSCs in vivo. These results uncover a novel mechanism of extraskeletal bone formation in FOP and provide a potential new therapeutic strategy for FOP.