Studies in Xenopus have shown that the C-terminal domain phosphatase-like domain (CPD) phosphatase Dullard is essential for proper neural development via inhibition of bone morphogenetic protein (BMP) signaling receptors. In contrast, the orthologous budding yeast Nem1 and human Dullard have been shown to dephosphorylate the phosphatidate phosphatases yeast Smp2 ⁄ Pah1 and human Lipin, and the relationship between phospholipid metabolism and BMP signaling remain unsolved. Here we report evidence that the Dullard-Lipin phosphatase cascade in Drosophila can regulate BMP signaling, most likely by affecting the function of the nuclear envelope. Manipulating expression levels of either the Drosophila Dullard gene, d-dullard (ddd) or the Lipin gene, DmLpin affected wing vein formation in a manner suggesting a negative effect on BMP signaling. Furthermore, both genes exhibit genetic interaction with BMP signaling pathway components, and can affect the levels of phosphorylated-Mothers against dpp (p-Mad). Although changing ddd expression levels did not have an obvious effect on overall nuclear envelope morphology as has been shown for yeast nem1, the nuclear import machinery components Importin-b and RanGAP were mislocalized and membrane lipid staining was altered in cells overexpressing ddd. Considering the known genetic interaction between Nup84 complex nucleoporins and nem1 in yeast, and the recently reported requirement for components from the orthologous nucleoporin complex in the nuclear translocation of Drosophila Mad (Chen & Xu 2010), it is likely that the role of Drosophila Dullard in regulating membrane lipid homeostasis is conserved and is critical for normal BMP signaling.