The formation of the functional mammalian cerebral cortex requires a concerted control of neurogenesis, neuronal migration and neuronal morphogenesis. However, molecular mechanisms that control those processes are not well understood. We have found that the BMP signaling downstream transcription factor SMAD1 and collapsin response mediator protein-2 (CRMP2) are inversely and complementarily expressed in developing neocortex. BMPs can suppress CRMP2 expression in cortical cells. Our ChIP assay demonstrates that both SMAD1 and 4 bind to CRMP2 promoter in neocortex and overexpression of SMAD1 and 4 in vivo suppresses CRMP2 expression. RNA interference of CRMP2 and overexpression of dominant negative forms of CRMP2 in utero cause accumulation of multipolar cells in the ventricular zone, subventricular zone and intermediate zone and suppresses neurite outgrowth, suggesting that CRMP2 is required for multipolar to bipolar transition for directional neuronal migration and neurite outgrowth. Thus, our study reveals a novel mechanism that the BMP-SMAD signaling pathway controls neuronal migration and neurite outgrowth by suppressing the transcription of CRMP2.