Secreted ligands in the Dpp/BMP family drive dorsal–ventral (D/V) axis formation in all Bilaterian species. However, maternal factors regulating Dpp/BMP transcription in this process are largely unknown. We identified the BTB domain protein longitudinals lacking-like (lolal) as a modifier of decapentaplegic (dpp) mutations. We show that Lolal is evolutionarily related to the Trithorax group of chromatin regulators and that lolal interacts genetically with the epigenetic factor Trithorax-like during Dpp D/V signaling. Maternally driven Lolal^HA is found in oocytes and translocates to zygotic nuclei prior to the point at which dpp transcription begins. lolal maternal and zygotic mutant embryos display significant reductions in dpp, pMad, and zerknullt expression, but they are never absent. The data suggest that lolal is required to maintain dpp transcription during D/V patterning. Phylogenetic data revealed that lolal is an evolutionarily new gene present only in insects and crustaceans. We conclude that Lolal is the first maternal protein identified with a role in dpp D/V transcriptional maintenance, that Lolal and the epigenetic protein Trithorax-like are essential for Dpp D/V signaling and that the architecture of the Dpp D/V pathway evolved in the arthropod lineage after the separation from vertebrates via the incorporation of new genes such as lolal.