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A fundamental challenge in biology is to explain how progenitor cells in developing tissues acquire distinct fates according to their position. In vertebrates, the positional information that specifies the germ layers and the primary body axes is mediated by Nodal. Nodal meets the criteria of a morphogen since it can diffuse through tissues and signal far away from its source to directly specify multiple cell fates in a dosage-dependent manner. To consider the relationship between trafficking and graded Nodal signaling, this review summarizes recent findings how the spreading of Nodal activity is regulated by factors that promote long range signaling during left-right axis formation, and by structural features that affect Nodal protein stability and endosomal sorting.