Wingless (Wg), a founding member of the Wingless/Int-1 (Wnt) family of secreted proteins, acts as a short-range inducer and as a long-range organizer during Drosophila development. Here, we determine the consequences of ectopically expressing (i) a wild-type form of Wg, (ii) a membrane-tethered form of Wg, and (iii) a constitutively active form of the cytosolic protein Armadillo (Arm), which normally acts to transduce Wg, and we compare them with the effects of removing endogenous Wg or Arm activity. Our results indicate that wild-type Wg acts at long range, up-regulating the transcription of particular target genes as a function of concentration and distance from secreting cells. In contrast, tethered Wg and Arm have only short-range or autonomous effects, respectively, on the transcription of these genes. We interpret these findings as evidence that Wg can act directly and at long range as a gradient morphogen during normal development.