During development, cells acquire positional information by reading the concentration of morphogens. In the developing fly wing, a gradient of the transforming growth factor-beta (TGF-beta)-type morphogen decapentaplegic (Dpp) is transduced into a gradient of concentration of the phosphorylated form of the R-Smad transcription factor Mad. The endosomal protein Sara (Smad anchor for receptor activation) recruits R-Smads for phosphorylation by the type I TGF-beta receptor. We found that Sara, Dpp, and its type I receptor Thickveins were targeted to a subpopulation of apical endosomes in the developing wing epithelial cells. During mitosis, the Sara endosomes and the receptors therein associated with the spindle machinery to segregate into the two daughter cells. Daughter cells thereby inherited equal amounts of signaling molecules and thus retained the Dpp signaling levels of the mother cell.