Nodal is a signalling molecule that belongs to the transforming growth factor-beta superfamily of proteins, and Lefty proteins are antagonists of Nodal signalling. The nodal and lefty genes form positive and negative regulatory loops that resemble the reaction-diffusion system. As a pair, these genes control various events of vertebrate embryonic patterning, including left-right specification and mesoderm formation. In this review, we will focus on recent studies that have addressed the roles of nodal and lefty in mouse development.