The bone morphogenetic protein (BMP) and activin membrane‐bound inhibitor (BAMBI) is a transmembrane TGFRI/BMPRI‐related pseudoreceptor, antagonizes transforming growth factor (TGF)‐β/BMP signaling by inhibiting the formation of functional authentic receptor complexes (TGFRI/BMPRI and TGFRII/BMPRII). On the assumption that BAMBI gene expression is epigenetically altered during human bladder cancer progression, we screened the expression of BAMBI protein by immunohistochemistry and the methylation status of the BAMBI promoter. In the normal or reactive urothelium, BAMBI expression was mostly overlapped with that of BMPRI, and a similar colocalization pattern was noted in low‐grade papillary cancers. In high‐grade and invasive cancers, however, mainly two reciprocal immunohistochemical expression patterns were observed: BAMBI‐low/BMPRI‐high, and BAMBI‐high/BMPRI‐low, indicating that BAMBI expression is controlled such that it does not interfere with the responsiveness of high‐grade cancer cells to TGF‐β/BMP signaling. Moreover, methylation of the BAMBI gene correlated significantly with negative BAMBI expression in bladder tumors. Although BAMBI overexpression significantly increased the number of apoptotic cells in T24 line, knock‐down small interfering RNA showed no remarkable change. Cell motility assay revealed that on treatment with either TGF‐β1 or BMP2, T24 and HTB9 lines showed a marked increase in the number of migrated cells which, however, decreased significantly through the forced expression of BAMBI. Since certain subsets of aggressive tumors often promote cell motility, invasion and survival by inducing epithelial‐to‐mesenchymal transition through TGF‐β/BMP in an autocrine and paracrine manner, hypermethylation of the BAMBI gene promoter that leads to BAMBI gene suppression may be one of the epigenetic events affecting the invasiveness or aggressiveness of bladder cancers. © 2009 UICC