Bone morphogenetic proteins (BMPs) regulate dorsal/ventral (D/V) patterning across the animal kingdom; however, the biochemical properties of certain pathway components can vary according to species-specific developmental requirements. For example, Tolloid (Tld)-like metalloproteases cleave vertebrate BMP-binding proteins called Chordins constitutively, while the Drosophila Chordin ortholog, Short gastrulation (Sog), is only cleaved efficiently when bound to BMPs. We identified Sog characteristics responsible for making its cleavage dependent on BMP binding. "Chordin-like" variants that are processed independently of BMPs changed the steep BMP gradient found in Drosophila embryos to a shallower profile, analogous to that observed in some vertebrate embryos. This change ultimately affected cell fate allocation and tissue size and resulted in increased variability of patterning. Thus, the acquisition of BMP-dependent Sog processing during evolution appears to facilitate long-range ligand diffusion and formation of a robust morphogen gradient, enabling the bistable BMP signaling outputs required for early Drosophila patterning.