Bone morphogenetic proteins (Bmps) control dorsoventral patterning of vertebrate embryos through the establishment of a ventrodorsal gradient of the activated downstream cytoplasmic effectors Smad1/5/8. Some Bmp ligands are expressed in the ventral and lateral regions and in the organizer during gastrulation of the embryo, but it remains unclear how organizer-derived Bmps contribute to total Bmp ligand levels and to the establishment of the correct phospho-Smad1/5/8 gradient along the ventrodorsal axis. Here we demonstrate that interference with organizer-specific Bmp2b signalling in zebrafish embryos alters the phospho-Smad1/5/8 gradient throughout the ventrodorsal axis, elevates the levels of the Bmp antagonist Chordin and dorsalizes the embryos. Moreover, we show that organizer-derived Bmp2b represses chordin transcription in the organizer and contributes to the control of the Chordin gradient. Combining these experimental results with simulations of Bmp's reaction-diffusion dynamics, our data indicate that organizer-produced Bmp2b is required for the establishment and maintenance of a Bmp activity gradient and for appropriate embryonic dorsoventral patterning during gastrulation.