The BMP ligand Dpp, operates as a long range morphogen to control many important functions during Drosophila development from tissue patterning to growth. The BMP signal is transduced intracellularly via C-terminal phosphorylation of the BMP transcription factor Mad, which forms an activity gradient in developing embryonic tissues. Here we show that Cyclin dependent kinase 8 and Shaggy phosphorylate three Mad linker serines. We demonstrate that linker phosphorylations control the peak intensity and range of the BMP signal across rapidly developing embryonic tissues. Shaggy knockdown broadened the range of the BMP-activity gradient and increased high threshold target gene expression in the early embryo, while expression of a Mad linker mutant in the wing disc resulted in enhanced levels of C-terminally phosphorylated Mad, a 30% increase in wing tissue, and elevated BMP target genes. In conclusion, our results describe how Mad linker phosphorylations work to control the peak intensity and range of the BMP signal in rapidly developing Drosophila tissues.