During oogenesis and early embryonic development in Drosophila, translation of proteins from maternally deposited mRNAs is tightly controlled. We and others have previously shown that translational regulatory proteins that function during oogenesis also have essential roles in the nervous system. Here we examine the role of Cup in neuromuscular system development. Maternal Cup controls translation of localized mRNAs encoding the Oskar and Nanos proteins and binds to the general translation initiation factor eIF4E. In this paper, we show that zygotic Cup protein is localized to presynaptic terminals at larval neuromuscular junctions (NMJs). cup mutant NMJs have strong phenotypes characterized by the presence of small clustered boutons called satellite boutons. They also exhibit an increase in the frequency of spontaneous glutamate release events (mEPSPs). Reduction of eIF4E expression synergizes with partial loss of Cup expression to produce satellite bouton phenotypes. The presence of satellite boutons is often associated with increases in retrograde bone morphogenetic protein (BMP) signaling, and we show that synaptic BMP signaling is elevated in cup mutants. cup genetically interacts with two genes, EndoA and Dap160, that encode proteins involved in endocytosis that are also neuronal modulators of the BMP pathway. Endophilin protein, encoded by the EndoA gene, is downregulated in a cup mutant. Our results are consistent with a model in which Cup and eIF4E work together to ensure efficient localization and translation of endocytosis proteins in motor neurons and control the strength of the retrograde BMP signal.