Self-organization of discrete fates in human gastruloids is mediated by a hierarchy of signaling pathways. How these pathways are integrated in time, and whether cells maintain a memory of their signaling history remains obscure. Here, we dissect the temporal integration of two key pathways, WNT and ACTIVIN, which along with BMP control gastrulation. CRISPR/Cas9-engineered live reporters of SMAD1, 2 and 4 demonstrate that in contrast to the stable signaling by SMAD1, signaling and transcriptional response by SMAD2 is transient, and while necessary for pluripotency, it is insufficient for differentiation. Pre-exposure to WNT, however, endows cells with the competence to respond to graded levels of ACTIVIN, which induces differentiation without changing SMAD2 dynamics. This cellular memory of WNT signaling is necessary for ACTIVIN morphogen activity. A re-evaluation of the evidence gathered over decades in model systems, re-enforces our conclusions and points to an evolutionarily conserved mechanism.