The dorsoventral (DV) axis of the Drosophila embryo is patterned by a nuclear gradient of the Rel family transcription factor, Dorsal (Dl), that activates or represses numerous target genes in a region-specific manner. Here, we demonstrate that signaling by receptor tyrosine kinases (RTK) reduces nuclear levels and transcriptional activity of Dl, both at the poles and in the mid-body of the embryo. These effects depend on wntD, which encodes a Dl antagonist belonging to the Wingless/Wnt family of secreted factors. Specifically, we show that, via relief of Groucho- and Capicua-mediated repression, the Torso and EGFR RTK pathways induce expression of WntD, which in turn limits Dl nuclear localization at the poles and along the DV axis. Furthermore, this RTK-dependent control of Dl is important for restricting expression of its targets in both contexts. Thus, our results reveal a new mechanism of crosstalk, whereby RTK signals modulate the spatial distribution and activity of a developmental morphogen in vivo.