The TGFbeta-related growth factor Nodal governs anteroposterior (AP) and left-right (LR) axis formation in the vertebrate embryo. A conserved intronic enhancer (ASE), containing binding sites for the fork head transcription factor Foxh1, modulates dynamic patterns of Nodal expression during early mouse development. This enhancer is responsible for early activation of Nodal expression in the epiblast and visceral endoderm, and at later stages governs asymmetric expression during LR axis formation. We demonstrate ASE activity is strictly Foxh1 dependent. Loss of this autoregulatory enhancer eliminates transcription in the visceral endoderm and decreases Nodal expression in the epiblast, but causes surprisingly discrete developmental abnormalities. Thus lowering the level of Nodal signaling in the epiblast disrupts both orientation of the AP axis and specification of the definitive endoderm. Targeted removal of the ASE also dramatically reduces left-sided Nodal expression, but the early events controlling LR axis specification are correctly initiated. However loss of the ASE disrupts Lefty2 (Leftb) expression and causes delayed Pitx2 expression leading to late onset, relatively minor LR patterning defects. The feedback loop is thus essential for maintenance of Nodal signals that selectively regulate target gene expression in a temporally and spatially controlled fashion in the mouse embryo.