Bone Morphogenetic Proteins (BMPs) are crucial for many aspects of the development and differentiation of the nervous system and are important in controlling cytoskeletal remodeling during neuronal morphogenesis. BMPs are TGFβ superfamily members that signal through a heteromeric complex of type I and type II BMP receptors. The BMPRII receptor is particularly important in mediating remodeling of the neuronal cytoskeleton through the activation of BMPRII-bound cytoskeletal regulators, such as LIM Kinase (LIMK). Here, we show that PAK1, a key regulator of diverse neuronal processes and an upstream activator of LIMK, binds to the BMP type I receptor, ALK2. Although, PAK1 is dispensable for activation of the Smad transcriptional mediators, abrogation of PAK1 expression or inhibition of PAK1 activity prevents BMP-induced neurite outgrowth in cultured neuroblastoma cell lines. Moreover, in primary murine embryonic cortical neurons, inhibition of PAK activity blocks BMP7-induced cofilin phosphorylation, prevents remodeling of the actin cytoskeleton and thereby blocks BMP7-induced dendrite formation. Thus, we propose a model in which BMP7 signaling leads to the recruitment of ALK2-bound PAK1 to BMPRII, which binds a downstream regulator of the actin cytoskeleton, LIMK1, and that the BMP receptor complex thereby acts as a scaffold to localize and coordinate actin cytoskeletal remodeling. We propose that this scaffold plays a key role in mediating BMP7-dependent dendritogenesis in primary cortical neurons.