In vertebrates, specification of anteroposterior (A/P) and left-right (L/R) axes depends on TGFbeta-related signals, including Nodal, Lefty, and BMPs. Endoproteolytic maturation of these proteins is probably mediated by the proprotein convertase SPC1/Furin. In addition, precursor processing may be regulated by related activities such as SPC4 (also known as PACE4). Here, we show that a proportion of embryos lacking SPC4 develop situs ambiguus combined with left pulmonary isomerism or complex craniofacial malformations including cyclopia, or both. Gene expression analysis during early somite stages indicates that spc4 is genetically upstream of nodal, pitx2, lefty1, and lefty2 and perhaps maintains the balance between Nodal and BMP signaling in the lateral plate that is critical for L/R axis formation. Furthermore, genetic interactions between nodal and spc4, together with our analysis of chimeric embryos, strongly suggest that during A/P axis formation, SPC4 acts primarily in the foregut. These findings establish an important role for SPC4 in patterning the early mouse embryo.