According to the morphogen gradient concept, cells in one part of an embryo secrete diffusible molecules (morphogens) that spread to other nearby cells and activate genes at different threshold concentrations. Strong support for the operation of a morphogen gradient mechanism in vertebrate development has come from the biochemical experiments of Green and Smith, who induced different kinds of gene expression in amphibian blastula cells exposed to small changes in activin concentration. But the interpretation of these experiments has been complicated by recent reports that cells tested for gene expression 3 hours after exposure to activin fail to show the graded response previously reported at 15 hours, a result suggesting that cells recognize their position in a gradient by an indirect mechanism. Here we conclude from the in situ analysis of blastula tissue containing activin-loaded beads that cells respond directly to changing morphogen concentrations in a way that resembles a ratchet-like process.