The homeodomain (HD) protein Bicoid (Bcd) is thought to function as a gradient morphogen that positions boundaries of target genes via threshold-dependent activation mechanisms. Here, we analyze 66 Bcd-dependent regulatory elements and show that their boundaries are positioned primarily by repressive gradients that antagonize Bcd-mediated activation. A major repressor is the pair-rule protein Runt (Run), which is expressed in an opposing gradient and is necessary and sufficient for limiting Bcd-dependent activation. Evidence is presented that Run functions with the maternal repressor Capicua and the gap protein Kruppel as the principal components of a repression system that correctly orders boundaries throughout the anterior half of the embryo. These results put conceptual limits on the Bcd morphogen hypothesis and demonstrate how the Bcd gradient functions within the gene network that patterns the embryo.