Tgif1 and Tgif2 are transcriptional co-repressors that limit the response to TGFbeta signaling and play a role in regulating retinoic-acid-mediated gene expression. Mutations in human TGIF1 are associated with holoprosencephaly, but it is unclear whether this is a result of deregulation of TGFbeta/Nodal signaling, or of effects on other pathways. Surprisingly, mutation of Tgif1 in mice results in only relatively mild developmental phenotypes in most strain backgrounds. Here, we show that loss-of-function mutations in both Tgif1 and Tgif2 result in a failure of gastrulation. By conditionally deleting Tgif1 in the epiblast, we demonstrate that a single wild-type allele of Tgif1 in the extra-embryonic tissue allows the double null embryos to gastrulate and begin organogenesis, suggesting that extra-embryonic Tgif function is required for patterning the epiblast. Genetically reducing the dose of Nodal in embryos lacking all Tgif function results in partial rescue of the gastrulation defects. Conditional double null embryos have defects in left-right asymmetry, which are also alleviated by reducing the dose of Nodal. Together, these data show that Tgif function is required for gastrulation, and provide the first clear evidence that Tgifs limit the transcriptional response to Nodal signaling during early embryogenesis.