Fibroblast growth factors (FGFs) are secreted molecules that can activate the RAS/mitogen-activated protein kinase (MAPK) pathway to serve crucial functions during embryogenesis. Through an in situ hybridization screen for genes with restricted expression patterns during early zebrafish development, we identified a group of genes that exhibit similar expression patterns to FGF genes. We report the characterization of zebrafish MAP kinase phosphatase 3 (MKP3; DUSP6 - Zebrafish Information Network), a member of the FGF synexpression group, showing that it has a crucial role in the specification of axial polarity in the early zebrafish embryo. MKP3 dephosphorylates the activated form of MAPK, inhibiting the RAS/MAPK arm of the FGF signaling pathway. Gain- and loss-of-function studies reveal that MKP3 is required to limit the extent of FGF/RAS/MAPK signaling in the early embryo, and that disturbing this inhibitory pathway disrupts dorsoventral patterning at the onset of gastrulation. The earliest mkp3 expression is restricted to the future dorsal region of the embryo where it is initiated by a maternal beta-catenin signal, but soon after its initiation, mkp3 expression comes under the control of FGF signaling. Thus, mkp3 encodes a feedback attenuator of the FGF pathway, the expression of which is initiated at an early stage so as to ensure correct FGF signaling levels at the time of axial patterning.