As the closest outgroup to the Bilateria, the Phylum Cnidaria is likely to be critical to understanding the origins and evolution of body axes. Proteins of the decapentaplegic (DPP)/bone morphogenetic protein (BMP) 2/4 subfamily are central to the specification of the dorsoventral (D/V) axis in bilateral animals, albeit with an axis inversion between arthropods and chordates. We show that a dpp/BMP2/4 ortholog (bmp2/4-Am) is present in the reef-building scleractinian coral, Acropora millepora (Class Anthozoa) and that it is capable of causing phenotypic effects in Drosophila that mimic those of the endogenous dpp gene. We also show that, during coral embryonic development, bmp2/4-Am expression is localized in an ectodermal region adjacent to the blastopore. Thus, a representative of the DPP/BMP2/4 subfamily of ligands was present in the common ancestor of diploblastic and triploblastic animals where it was probably expressed in a localized fashion during development. A localized source of DPP/BMP2/4 may have already been used in axis formation in this ancestor, or it may have provided a means by which an axis could evolve in triploblastic animals.