Formation of the dorsal-ventral axis of the sea urchin embryo relies on cell interactions initiated by the TGFbeta Nodal. Intriguingly, although nodal expression is restricted to the ventral side of the embryo, Nodal function is required for specification of both the ventral and the dorsal territories and is able to restore both ventral and dorsal regions in nodal morpholino injected embryos. The molecular basis for the long-range organizing activity of Nodal is not understood. In this paper, we provide evidence that the long-range organizing activity of Nodal is assured by a relay molecule synthesized in the ventral ectoderm, then translocated to the opposite side of the embryo. We identified this relay molecule as BMP2/4 based on the following arguments. First, blocking BMP2/4 function eliminated the long-range organizing activity of an activated Nodal receptor in an axis rescue assay. Second, we demonstrate that BMP2/4 and the corresponding type I receptor Alk3/6 functions are both essential for specification of the dorsal region of the embryo. Third, using anti-phospho-Smad1/5/8 immunostaining, we show that, despite its ventral transcription, the BMP2/4 ligand triggers receptor mediated signaling exclusively on the dorsal side of the embryo, one of the most extreme cases of BMP translocation described so far. We further report that the pattern of pSmad1/5/8 is graded along the dorsal-ventral axis and that two BMP2/4 target genes are expressed in nested patterns centered on the region with highest levels of pSmad1/5/8, strongly suggesting that BMP2/4 is acting as a morphogen. We also describe the very unusual ventral co-expression of chordin and bmp2/4 downstream of Nodal and demonstrate that Chordin is largely responsible for the spatial restriction of BMP2/4 signaling to the dorsal side. Thus, unlike in most organisms, in the sea urchin, a single ventral signaling centre is responsible for induction of ventral and dorsal cell fates. Finally, we show that Chordin may not be required for long-range diffusion of BMP2/4, describe a striking dorsal-ventral asymmetry in the expression of Glypican 5, a heparin sulphated proteoglycan that regulates BMP mobility, and show that this asymmetry depends on BMP2/4 signaling. Our study provides new insights into the mechanisms by which positional information is established along the dorsal-ventral axis of the sea urchin embryo, and more generally on how a BMP morphogen gradient is established in a multicellular embryo. From an evolutionary point of view, it highlights that although the genes used for dorsal-ventral patterning are highly conserved in bilateria, there are considerable variations, even among deuterostomes, in the manner these genes are used to shape a BMP morphogen gradient.