We review how studies on the first Spemann-Mangold organizer marker, the homeobox gene goosecoid, led to the discovery of secreted factors that pattern the vertebrate embryo. Microinjection of goosecoid mRNA formed secondary axes and recruited neighboring cells. These non-cell autonomous effects are mediated in part by the expression of secreted factors such as chordin, cerberus and Frzb-1. Unexpectedly, many of the molecules secreted by the Spemann-Mangold organizer turned out to be antagonists that bind growth factors in the extracellular space and prevent them from binding to their receptors. The case of chordin is reviewed in detail, for this molecule has provided biochemical insights into how patterning by Spemann's organizer can be regulated by diffusion and proteolytic control. The study of the BMP-binding repeats of Chordin, which are present in many extracellular proteins, may provide a new paradigm for how cell-cell signaling is regulated in the extracellular space not only in embryos, but also in adult tissues.