Bistability in developmental pathways refers to the generation of binary outputs from graded or noisy inputs. Signaling thresholds are critical for bistability. Specification of the left/right (LR) axis in vertebrate embryos involves bistable expression of transforming growth factor beta (TGFbeta) member NODAL in the left lateral plate mesoderm (LPM) controlled by feed-forward and feedback loops. Here we provide evidence that bone morphogenetic protein (BMP)/SMAD1 signaling sets a repressive threshold in the LPM essential for the integrity of LR signaling. Conditional deletion of Smad1 in the LPM led to precocious and bilateral pathway activation. NODAL expression from both the left and right sides of the node contributed to bilateral activation, indicating sensitivity of mutant LPM to noisy input from the LR system. In vitro, BMP signaling inhibited NODAL pathway activation and formation of its downstream SMAD2/4-FOXH1 transcriptional complex. Activity was restored by overexpression of SMAD4 and in embryos, elevated SMAD4 in the right LPM robustly activated LR gene expression, an effect reversed by superactivated BMP signaling. We conclude that BMP/SMAD1 signaling sets a bilateral, repressive threshold for NODAL-dependent Nodal activation in LPM, limiting availability of SMAD4. This repressive threshold is essential for bistable output of the LR system.