Spemann's organizer plays an essential role in patterning the vertebrate embryo. During gastrulation, organizer cells involute and form the prechordal plate anteriorly and the notochord more posteriorly. The fate mapping and gene expression analyses in zebrafish presented in this study reveal that this anteroposterior polarity is already initiated in the organizer before gastrulation. Prechordal plate progenitors reside close to the blastoderm margin and express the homeobox gene goosecoid, whereas notochord precursors are located further from the margin and express the homeobox gene floating head. The nodal-related genes cyclops and squint are expressed at the blastoderm margin and are required for prechordal plate and notochord formation. We show that differential activation of the Nodal signaling pathway is essential in establishing anteroposterior pattern in the organizer. First, overexpression of cyclops and squint at different doses leads to the induction of floating head at low doses and the induction of both goosecoid and floating head at higher doses. Second, decreasing Nodal signaling using different concentrations of the antagonist Antivin inhibits goosecoid expression at low doses and blocks expression of both goosecoid and floating head at higher doses. Third, attenuation of Nodal signaling in zygotic mutants for the EGF-CFC gene one-eyed pinhead, an essential cofactor for Nodal signaling, leads to the loss of goosecoid expression and expansion of floating head expression in the organizer. Concomitantly, cells normally fated to become prechordal plate are transformed into notochord progenitors. Finally, activation of Nodal signaling at different times suggests that prechordal plate specification requires sustained Nodal signaling, whereas transient signaling is sufficient for notochord development. Together, these results indicate that differential Nodal signaling patterns the organizer before gastrulation, with the highest level of activity required for anterior fates and lower activity essential for posterior fates.