TGFβ signaling pathways of the bone morphogenetic protein (BMP) subclass are essential for dorsoventral pattern formation of both vertebrate and invertebrate embryos. Here we determine by chromosomal mapping, linkage analysis, cDNA sequencing and mRNA rescue that the dorsalized zebrafish mutant lost-a-fin (laf) is defective in the gene activin receptor-like kinase 8 (alk8), which encodes a novel type I TGFβ receptor. The alk8 mRNA is expressed both maternally and zygotically. Embyros that lack zygotic, but retain maternal Laf/Alk8 activity, display a weak dorsalization restricted to the tail and die by 3 days postfertilization. We rescued the laf dorsalized mutant phenotype by alk8 mRNA injection and generated homozygous laf/alk8 mothers to investigate the maternal role of Laf/Alk8 activity. Adult fish lacking Laf/Alk8 activity are fertile, exhibit a growth defect and are significantly smaller than their siblings. Embryos derived from homozygous females, which lack both maternal and zygotic Laf/Alk8 activity, display a strongly dorsalized mutant phenotype, no longer limited to the tail. These mutant embryos lack almost all gastrula ventral cell fates, with a concomitant expansion of dorsal cell types. During later stages, most of the somitic mesoderm and neural tissue circumscribe the dorsoventral axis of the embryo. Zygotic laf/alk8 mutants can be rescued by overexpression of the BMP signal transducer Smad5, but not the Bmp2b or Bmp7 ligands, consistent with the Laf/Alk8 receptor acting within a BMP signaling pathway, downstream of a Bmp2b/Bmp7 signal. Antibodies specific for the phosphorylated, activated form of Smad1/5, show that BMP signaling is nearly absent in gastrula lacking both maternal and zygotic Laf/Alk8 activity, providing further evidence that Laf/Alk8 transduces a BMP signal. In total, our work strongly supports the role of Laf/Alk8 as a type I BMP receptor required for the specification of ventral cell fates.