Morphogens are secreted signaling molecules that form concentration gradients and control cell fate in developing tissues. During development, it is essential that morphogen range is strictly regulated in order for correct cell type specification to occur. One of the best characterized morphogens is Drosophila Decapentaplegic (Dpp), a BMP signaling molecule that patterns the dorsal ectoderm of the embryo by activating the Mad and Medea (Med) transcription factors. We demonstrate that there is a spatial and temporal expansion of the expression patterns of Dpp target genes in SUMO pathway mutant embryos. We identify Med as the primary SUMOylation target in the Dpp pathway, and show that failure to SUMOylate Med leads to the increased Dpp signaling range observed in the SUMO pathway mutant embryos. Med is SUMO modified in the nucleus, and we provide evidence that SUMOylation triggers Med nuclear export. Hence, Med SUMOylation provides a mechanism by which nuclei can continue to monitor the presence of extracellular Dpp signal to activate target gene expression for an appropriate duration. Overall, our results identify an unusual strategy for regulating morphogen range that, rather than impacting on the morphogen itself, targets an intracellular transducer.