Somitogenesis requires bilateral rhythmic segmentation of paraxial mesoderm along the antero-posterior axis. The location of somite segmentation depends on opposing signalling gradients of retinoic acid (generated by retinaldehyde dehydrogenase-2; Raldh2) anteriorly and fibroblast growth factor (FGF; generated by Fgf8) posteriorly. Retinoic-acid-deficient embryos exhibit somite left-right asymmetry, but it remains unclear how retinoic acid mediates left-right patterning. Here, we demonstrate that retinoic-acid signalling is uniform across the left-right axis and occurs in node ectoderm but not node mesoderm. In Raldh2(-/-) mouse embryos, ectodermal Fgf8 expression encroaches anteriorly into node ectoderm and neural plate, but its expression in presomitic mesoderm is initially unchanged. The late stages of somitogenesis were rescued in Raldh2(-/-) mouse embryos when the maternal diet was supplemented with retinoic acid until only the 6-somite stage, demonstrating that retinoic acid is only needed during node stages. A retinoic-acid-reporter transgene marking the action of maternal retinoic acid in rescued Raldh2(-/-) embryos revealed that the targets of retinoic-acid signalling during somitogenesis are the node ectoderm and the posterior neural plate, not the presomitic mesoderm. Our findings suggest that antagonism of Fgf8 expression by retinoic acid occurs in the ectoderm and that failure of this mechanism generates excessive FGF8 signalling to adjacent mesoderm, resulting initially in smaller somites and then left-right asymmetry.