We previously reported that the membrane-bound SCUBE1 (signal peptide-CUB-epithelial growth factor domain-containing protein 1) forms a complex with bone morphogenetic protein 2 (BMP2) ligand and its receptors, thus acting as a BMP co-receptor to augment BMP signal activity. However, whether SCUBE1 can bind to and facilitate signaling activity of BMP7, a renal protective molecule for ischemia-reperfusion (I/R) insult, and contribute to the proliferation and repair of renal tubular cells after I/R remains largely unknown. In this study, we first showed that I/R-induced SCUBE1 was expressed in proximal tubular cells, which coincided with the expression of renoprotective BMP7. Molecular and biochemical analyses revealed that SCUBE1 directly binds to BMP7 and its receptors, functioning as a BMP co-receptor to promote BMP7 signaling. Furthermore, we used a new Scube1 deletion (Δ2) mouse strain to further elucidate the renal pathophysiological function of SCUBE1 after I/R injury. As compared with wild-type littermates, Δ2 mice showed severe renal histopathologic features (extensive loss of brush border, tubular necrosis, and tubular dilation) and increased inflammation (neutrophil infiltrate and induction of monocyte chemoattractant protein-1, tumor necrosis factor-α and interleukin-6) during the resolution of I/R damage. They also showed reduced BMP signaling (phosphorylated Smad1/5/8) along with decreased proliferation and increased apoptosis of renal tubular cells. Importantly, lentivirus-mediated overexpression of SCUBE1 enhanced BMP signaling and conferred a concomitant survival outcome for Δ2 proximal tubular epithelial cells after hypoxia–reoxygenation treatment. The protective BMP7 signaling may be facilitated by stress-inducible SCUBE1 after renal I/R, which suggests potential targeted approaches for acute kidney injury.