Growth factor signaling is essential for pattern formation, growth, differentiation, and maintenance of stem cell pluripotency. Nodal-related signaling factors are required for axis formation and germ layer specification from sea urchins to mammals. Maternal transcripts of the zebrafish Nodal factor, Squint (Sqt), are localized to future embryonic dorsal. The mechanisms by which maternal sqt/nodal RNA is localized and regulated have been unclear. Here, we show that maternal control of Nodal signaling via the conserved Y box-binding protein 1 (Ybx1) is essential. We identified Ybx1 via a proteomic screen. Ybx1 recognizes the 3'’ untranslated region (UTR) of sqt RNA and prevents premature translation and Sqt/Nodal signaling. Maternal-effect mutations in zebrafish ybx1 lead to deregulated Nodal signaling, gastrulation failure, and embryonic lethality. Implanted Nodal-coated beads phenocopy ybx1 mutant defects. Thus, Ybx1 prevents ectopic Nodal activity, revealing a new paradigm in the regulation of Nodal signaling, which is likely to be conserved.