Cerebral arteriovenous malformations (AVMs) are common vascular malformations, which may result in hemorrhagic strokes and neurological deficits. Bone morphogenetic protein (BMP) and Notch signaling are both involved in the development of cerebral AVMs, but the cross-talk between the two signaling pathways is poorly understood. Here, we show that deficiency of matrix Gla protein (MGP), a BMP inhibitor, causes induction of Notch ligands, dysregulation of endothelial differentiation, and the development of cerebral AVMs in MGP null (Mgp^−/−) mice. Increased BMP activity due to the lack of MGP induces expression of the activin receptor-like kinase 1, a BMP type I receptor, in cerebrovascular endothelium. Subsequent activation of activin receptor-like kinase 1 enhances expression of Notch ligands Jagged 1 and 2, which increases Notch activity and alters the expression of Ephrin B2 and Ephrin receptor B4, arterial and venous endothelial markers, respectively. Reducing the expression of Jagged 1 and 2 in the Mgp^−/− mice by crossing them with Jagged 1 or 2 deficient mice reduces Notch activity, normalizes endothelial differentiation, and prevents cerebral AVMs, but not pulmonary or renal AVMs. Our results suggest that Notch signaling mediates and can modulate changes in BMP signaling that lead to cerebral AVMs.