Bidirectional cellular communication is integral to both cancer progression and embryological development. In addition, aggressive tumor cells are phenotypically plastic, sharing many properties with embryonic cells. Owing to the similarities between these two types of cells, the developing zebrafish can be used as a biosensor for tumor-derived signals. Using this system, we show that aggressive melanoma cells secrete Nodal (a potent embryonic morphogen) and consequently can induce ectopic formation of the embryonic axis. We further show that Nodal is present in human metastatic tumors, but not in normal skin, and thus may be involved in melanoma pathogenesis. Inhibition of Nodal signaling reduces melanoma cell invasiveness, colony formation and tumorigenicity. Nodal inhibition also promotes the reversion of melanoma cells toward a melanocytic phenotype. These data suggest that Nodal signaling has a key role in melanoma cell plasticity and tumorigenicity, thereby providing a previously unknown molecular target for regulating tumor progression.