Deltex (Dx) is a context-dependent regulator of Notch signaling and regulates Notch signaling in a non-canonical fashion by facilitating the endocytosis of its receptor. In an RNAi- based modifier screen of kinases and phosphatases Thickveins (Tkv), the receptor of Decapentaplegic (Dpp), was identified as one of the interactors of Dx. Dpp, a Drosophila TGF-β/Bone Morphogenetic Protein homolog acts as a morphogen to specify cell fate along the anterior-posterior axis of the wing. Tight regulation of Dpp signaling is thus indispensable for its proper functioning. Here we present Dx as a novel modulator of Dpp signaling. We show evidence for the very first time that dx genetically interacts with dpp and its pathway components. Immunocytochemical analysis shows that Dx co-localizes with Dpp and its receptor Tkv in the Drosophila third instar larval tissues. Further, Dx is also seen to modulate the expression of dpp and its target genes. Here, we attribute this modulation to the endocytosis and trafficking of Dpp through Dx. This study thus presents a whole new avenue of Dpp signaling regulation via the cytoplasmic protein Dx.