Developing cells acquire positional information by reading the graded distribution of morphogens. In Drosophila, the Dpp morphogen forms a long-range concentration gradient by spreading from a restricted source in the developing wing. It has been assumed that Dpp spreads by extracellular diffusion. Under this assumption, the main role of endocytosis in gradient formation is to downregulate receptors at the cell surface. These surface receptors bind to the ligand and thereby interfere with its long-range movement. Recent experiments indicate that Dpp spreading is mediated by Dynamin-dependent endocytosis in the target tissue, suggesting that extracellular diffusion alone cannot account for Dpp dispersal. Here, we perform a theoretical study of a model for morphogen spreading based on extracellular diffusion, which takes into account receptor binding and trafficking. We compare profiles of ligand and surface receptors obtained in this model with experimental data. To this end, we monitored directly the pool of surface receptors and extracellular Dpp with specific antibodies. We conclude that current models considering pure extracellular diffusion cannot explain the observed role of endocytosis during Dpp long-range movement.