Left-sided expression of Nodal in the lateral plate mesoderm (LPM) during early embryogenesis is a crucial step in establishing the left–right (L–R) axis in vertebrates. In the chick, it was suggested that chick Cerberus (cCer), a Cerberus/Dan family member, induces Nodal expression by antagonizing bone morphogenetic protein (BMP) activity in the left LPM. In contrast, it has also been shown that BMPs positively regulate Nodal expression in the left LPM in the chick embryo. Thus, it is still unclear how the bilaterally expressed BMPs induce Nodal expression only in the left LPM. In this study, we demonstrate that BMP signaling is necessary and sufficient for the induction of Nodal expression in the chick LPM where the type I BMP receptor-IB (BMPR-IB) likely mediates this induction. Tissue grafting experiments indicate the existence of a Nodal inductive factor in the left LPM rather than the presence of a Nodal inhibitory factor in the right LPM. We demonstrate that cCer functions as a BMP agonist instead of antagonist, being able to enhance BMP signaling in cell culture. This conclusion is further supported by the immunoprecipitation assays that provide convincing biochemical evidence for a direct interaction between cCer and BMP receptor. Because cCer is expressed restrictedly in the left LPM, BMPs and cCer appear to act synergistically to activate Nodal expression in the left LPM in the chick. Developmental Dynamics 237:3613–3623, 2008. © 2008 Wiley-Liss, Inc.