During zebrafish gastrulation, the growth factor Fgf8a has been suggested to act as a morphogen, spreading from a localised source to form a concentration gradient and impart positional information to cells along a tissue field. Technical challenges have so far prevented direct visualisation of the Fgf8a gradient in real time. Here, Michael Brand and colleagues visualise the endogenous Fgf8a gradient in the developing zebrafish embryo. First, the authors generate an endogenous Fgf8a-EGFP knock-in line. Then, using a sensitive quantitative imaging technique and single-molecule fluorescence correlation spectroscopy, the authors visualise the Fgf8a-EGFP gradient from the margin to the animal pole of gastrulating embryos and monitor the propagation of Fgf8a-EGFP in the extracellular space. Next, the authors overlay the Fgf8a gradient curve with expression profiles of Fgf8a downstream targets to determine the input-output relationship of Fgf8a-mediated patterning. Furthermore, they manipulate the extracellular Fgf8a levels using heparinase treatment and observe that the signalling outcome is altered. Finally, by injecting membrane-tethered forms of Fgf8a to hinder its diffusion in the embryo, the authors demonstrate that Fgf8a requires extracellular diffusion from its source to induce downstream signalling at a distance. Overall, this study establishes Fgf8a as a morphogen forming a concentration gradient and activating threshold-dependent cellular responses in the developing zebrafish embryo.