One way in which cells acquire positional information during embryonic development is by measuring the local concentration of a signaling factor, or morphogen, that is secreted by an organizing center . The ways in which morphogen gradients are established, particularly in vertebrates, remain obscure, although various suggestions have been made for the mechanisms by which signaling molecules traverse fields of cells. These include simple diffusion, "cytonemes", filopodia, "argosomes", and "transcytosis". In this study, we use a functional EGFP-tagged ligand to visualize long-range signaling in the Xenopus embryo in real time. Our results show that the TGF-beta family member Xnr2 is secreted efficiently from embryonic cells, and a new method of tissue recombination allows us to investigate the way in which the morphogen traverses multiple cell diameters. This reveals that Xnr2 exerts long-range effects by diffusing rapidly through the extracellular milieu of nonexpressing cells. No evidence has been obtained for long-range signaling through cytonemes, filopodia, argosomes, or transcytosis. In demonstrating that long-range signaling in the early Xenopus embryo occurs by diffusion rather than by these alternative routes, our results suggest that different morphogens in different developmental contexts use different means of transport.