Situs-specific organogenesis in the mouse results from leftward fluid flow in the node cavity and subsequent left-sided expression of Nodal in the lateral plate mesoderm (LPM). Nodal expression at the node is essential for the subsequent asymmetric Nodal expression in the left LPM, but the precise role of Nodal produced at the node has remained unknown. We have now investigated how the Nodal signal is transferred from the node to the LPM. Externally supplied Nodal protein failed to signal to the LPM,suggesting that the Nodal signal is transferred to the LPM via an internal route rather than an external one. Transgenic rescue experiments showed that the Nodal co-receptor Cryptic (Cfc1) is required only in the LPM, not at the node, for asymmetric Nodal expression in the LPM, indicating that the Nodal signal is not relayed indirectly between the node and LPM. Nodal interacts in vitro with sulfated glycosaminoglycans (GAGs), which are specifically localized to the basement membrane-like structure between the node and LPM in the mouse embryo. Inhibition of sulfated GAG biosynthesis prevents Nodal expression in the LPM. These data suggest that Nodal produced at the node might travel directly to the LPM via interaction with sulfated GAGs.