13Establishment of morphogen gradients in the early Drosophila embryo is challenged by a 14 diffusible extracellular milieu, and rapid nuclear divisions that occur at the same time. To 15 understand how a sharp gradient is formed within this dynamic environment, we followed the 16 generation of graded nuclear Dorsal (Dl) protein, the hallmark of pattern formation along the 17 dorso-ventral axis, in live embryos. We show that a sharp gradient is formed through 18 extracellular, diffusion-based morphogen shuttling that progresses through several nuclear 19 divisions. Perturbed shuttling in wntD mutant embryos results in a flat activation peak and 20 aberrant gastrulation. Re-entry of Dl into the nuclei at each cycle refines the signaling output, 21 by guiding graded accumulation of the T48 transcript that drives patterned gastrulation. We 22 conclude that diffusion-based ligand shuttling, coupled with dynamic readout, establishes a 23 refined pattern within the diffusible environment of early embryos. 24 25 the BMP gradient in the Xenopus embryo, where it acquired additional features that allow 54 scaling of the gradient with embryo size (Ben-Zvi et al., 2014;Ben-Zvi et al., 2008). 55Compelling evidence for shuttling was provided by comparing mutant phenotypes with the 56 predictions made by computational models (Ben-Zvi et al., 2008;Eldar et al., 2002; Haskel-57 Ittah et al., 2012). It was also demonstrated that ligand produced ectopically in one part of the 58 embryo can be translocated to and endocytosed in the normal activation domain (Reversade 59 and De Robertis, 2005;Wang and Ferguson, 2005). Experimentally, these data were obtained 60 through the analysis of fixed embryos. Yet, the essence of the shuttling mechanism resides in 61 its dynamics. What is the time-frame during which the gradient is established? How fast is 62 gradient formation relative to its readout? Is the gradient stably formed, or is it subject to 63 subsequent cycles of refinements? Insight into these questions requires monitoring the dynamic 64 distribution of the morphogen within single embryos. 65 Furthermore, the shuttling mechanism makes a number of counter-intuitive predictions 66 regarding the dynamics of pattern formation. In particular, it predicts that signaling at the edge 67 of the source will initially increase, as ligand begins to accumulate, but will subsequently be 68 reduced, since ligand is continuously being shuttled to the center of the field. This non-69 monotonic behavior is a defining property of the shuttling mechanism that concentrates ligand, 70 but is absent from other diffusion-based mechanisms establishing a graded pattern. In a certain 71 parameter range, shuttling also predicts transient formation of a double-peak pattern within the 72 gradient, again a prediction that is absent from naĂŻve gradient-forming mechanisms. 73 Uncovering such features is again possible only by monitoring the dynamics of gradient 74 formation in live embryos. 75The ability to observe the dynamics of morphogen gradient formatio...