Patterning the avian left-right (L/R) body axis involves the establishment of asymmetric molecular signals on the left and right sides of Hensen's node. We have examined the role of the chick Midline 1 gene, cMid1, in generating asymmetric gene expression in the node. cMid1 is initially expressed bilaterally, but its expression is then confined to the right side of the node. We show that this restriction of cMid1 expression is a result of repression by Shh on the left side of the node. Misexpression of cMid1 on the left side of the node results in bilateral Bmp4 expression and a loss of Shh expression. Correspondingly, downstream left pathway genes are repressed while right pathway genes are ectopically activated. Conversely, knocking down endogenous right-sided cMid1 results in a loss of Bmp4 expression and bilateral Shh expression. This results in an absence of right pathway genes and the ectopic activation of the left pathway on the right. Here, we present a revised model for the establishment of asymmetric gene expression in Hensen's node based on the epistatic interactions observed between Shh, cMid1, and Bmp4.