Intricate interactions between the Wnt and Bmp signaling pathways pattern the gastrulating vertebrate embryo using a network of secreted protein ligands and inhibitors. While many of these proteins are expressed post-gastrula, their later roles have typically remained unclear, obscured by the effects of early perturbation. We find that Bmp signaling continues during somitogenesis in zebrafish embryos, with high activity in a small region of the mesodermal progenitor zone at the posterior end of the embryo. To test the hypothesis that Bmp inhibitors expressed just anterior to the tailbud are important to restrain Bmp signaling we produced a new zebrafish transgenic line, allowing temporal cell-autonomous activation of Bmp signaling and thereby bypassing the effects of the Bmp inhibitors. Ectopic activation of Bmp signaling during somitogenesis results in severe defects in the tailbud, including altered morphogenesis and gene expression. We show that these defects are due to non-autonomous effects on the tailbud, and present evidence that the tailbud defects are caused by alterations in Wnt signaling. We present a model in which the posteriorly expressed Bmp inhibitors function during somitogenesis to constrain Bmp signaling in the tailbud in order to allow normal expression of Wnt inhibitors in the presomitic mesoderm, which in turn constrain the levels of canonical and non-canonical Wnt signaling in the tailbud.