At the Drosophila neuromuscular junction (NMJ), the loss of retrograde, trans-synaptic BMP signaling causes motoneuron terminals to have fewer synaptic boutons, whereas increased neuronal activity results in a larger synapse with more boutons. Here, we show that an early and transient BMP signal is necessary and sufficient for NMJ growth as well as for activity-dependent synaptic plasticity. This early critical period was revealed by the temporally controlled suppression of Mad, the SMAD1 transcriptional regulator. Similar results were found by genetic rescue tests involving the BMP4/5/6 ligand Glass bottom boat (Gbb) in muscle, and alternatively the type II BMP receptor Wishful Thinking (Wit) in the motoneuron. These observations support a model where the muscle signals back to the innervating motoneuron's nucleus to activate presynaptic programs necessary for synaptic growth and activity-dependent plasticity. Molecular genetic gain- and loss-of-function studies show that genes involved in NMJ growth and plasticity, including the adenylyl cyclase Rutabaga, the Ig-CAM Fasciclin II, the transcription factor AP-1 (Fos/Jun), and the adhesion protein Neurexin, all depend critically on the canonical BMP pathway for their effects. By contrast, elevated expression of Lar, a receptor protein tyrosine phosphatase found to be necessary for activity-dependent plasticity, rescued the phenotypes associated with the loss of Mad signaling. We also find that synaptic structure and function develop using genetically separable, BMP-dependent mechanisms. Although synaptic growth depended on Lar and the early, transient BMP signal, the maturation of neurotransmitter release was independent of Lar and required later, ongoing BMP signaling.