As some of the most widely utilised intercellular signalling molecules, transforming growth factor beta (TGF beta) superfamily members play critical roles in normal development and become disrupted in human disease. Establishing appropriate levels of TGF beta signalling involves positive and negative feedback, which are coupled and driven by the same signal transduction components (R-Smad transcription factor complexes), but whether and how the regulation of the two can be distinguished are unknown. Genome-wide comparison of published ChIP-seq datasets suggests that LIM domain binding proteins (Ldbs) co-localise with R-Smads at a substantial subset of R-Smad target genes including the locus of inhibitory Smad7 (I-Smad7), which mediates negative feedback for TGF beta signalling. We present evidence suggesting that zebrafish Ldb2a binds and directly activates the I-Smad7 gene, whereas it binds and represses the ligand gene, Squint (Sqt), which drives positive feedback. Thus, the fine tuning of TGF beta signalling derives from positive and negative control by Ldb2a. Expression of ldb2a is itself activated by TGF beta signals, suggesting potential feed-forward loops that might delay the negative input of Ldb2a to the positive feedback, as well as the positive input of Ldb2a to the negative feedback. In this way, precise gene expression control by Ldb2a enables an initial build-up of signalling via a fully active positive feedback in the absence of buffering by the negative feedback. In Ldb2a-deficient zebrafish embryos, homeostasis of TGF beta signalling is perturbed and signalling is stably enhanced, giving rise to excess mesoderm and endoderm, an effect that can be rescued by reducing signalling by the TGF beta family members, Nodal and BMP. Thus, Ldb2a is critical to the homeostatic control of TGF beta signalling and thereby embryonic patterning.