The EGF-CFC gene Cripto encodes an extracellular protein that has been implicated in the signaling pathway for the transforming growth factor beta (TGFβ) ligand Nodal. Although recent findings in frog and fish embryos have suggested that EGF-CFC proteins function as coreceptors for Nodal, studies in cell culture have implicated Cripto as a growth factor-like signaling molecule. Here we reconcile these apparently disparate models of Cripto function by using a mammalian cell culture assay to investigate the signaling activities of Nodal and EGF-CFC proteins. Using a luciferase reporter assay, we found that Cripto has activities consistent with its being a coreceptor for Nodal. However, Cripto can also function as a secreted signaling factor in cell coculture assays, suggesting that it may also act as a coligand for Nodal. Furthermore, we found that the ability of Cripto to bind to Nodal and mediate Nodal signaling requires the addition of an O-linked fucose monosaccharide to a conserved site within EGF-CFC proteins. We propose a model in which Cripto has dual roles as a coreceptor as well as a coligand for Nodal and that this signaling interaction with Nodal is regulated by an unusual form of glycosylation. Our findings highlight the significance of extracellular modulation of ligand activity as an important means of regulating TGFβ signaling pathways during vertebrate development.