The transcription factor Brinker (Brk) represses gene expression in the Drosophila wing imaginal disc, where it is expressed in symmetrical lateral-to-medial gradients, a pattern that is established by inverse gradients of the TGF-beta, Dpp, which is in turn transduced into graded phosphorylated Mad (pMad, an R-Smad). pMad is part of a complex which directly represses brk. sal and omb are targets of Brk and are, thus, only expressed medially with their domains extending mediolaterally into the region where Brk is graded. omb extends more laterally than sal, indicating that higher levels of Brk are required to repress it. This is supported by our demonstration that higher levels of ectopic Brk are required to completely repress omb than sal. We also show, however, that Mad antagonizes the ability of Brk to repress these genes, indicating that pMad directly activates their expression (as well as repressing brk). Thus, whether a gene is expressed at a particular location may depend not only on how much Brk is present, but also on the level of pMad. We have also investigated the mechanism by which the brk expression gradient is established and show that it is not just a simple readout of the pMad gradient but requires Brk to repress its own expression. In brk mutants, the brk gradient is not established: brk is still off medially and on at high levels laterally, but there is almost no graded expression between these extremes. This Brk negative autoregulation appears to increase the sensitivity of the cells to Dpp/pMad and should also function to stabilize the brk gradient.