During embryonic development, diffusible signaling molecules called morphogens are thought to determine cell fates in a concentration-dependent manner, and protocols for directed stem cell differentiation are based on this picture. However, in the mammalian embryo, morphogen concentrations change rapidly compared to the time for making cell fate decisions. It is unknown how changing ligand levels are interpreted, and whether the precise timecourse of ligand exposure plays a role in cell fate decisions. In this talk I will discuss our work to address this question using human embryonic stem cells (hESCs), focusing on the dynamics of two morphogens that are crucial for vertebrate gastrulation: Nodal and BMP4. We showed that the response of hESCs to BMP4 signaling is indeed is determined by the ligand concentration, but that unexpectedly, the expression of many mesodermal targets of Nodal depends on the rate of concentration increase. In addition, we showed that a stem cell model for the human embryo generates a wave of Nodal signaling with cells experiencing rapidly increasing Nodal specifically in the region of mesendoderm differentiation. The BMP4 and Nodal pathways share the signal transducer Smad4. Using live imaging of hESCs with GFP integrated at the endogenous SMAD4 locus combined with Fluorescence Recovery After Photobleaching (FRAP), we demonstrated that response to rate of Activin change is due to adaptive signaling, which relies on sequestration of SMAD4. We also demonstrated that pulsatile stimulation with Activin induces repeated strong signaling and enhances mesoderm differentiation. Our results break with the paradigm of concentration-dependent differentiation and demonstrate an important role for morphogen dynamics in the cell fate decisions associated with mammalian gastrulation. They suggest a highly dynamic picture of embryonic patterning where some cell fates depend on rapid concentration increase rather than on absolute levels, and point to ligand dynamics as a new dimension to optimize protocols for directed stem cell differentiation.