ABSTRACT β-catenin is thought to mediate cell fate specification events by localizing to the nucleus where it modulates gene expression. To ask whether β-catenin is involved in cell fate specification during sea urchin embryogenesis, we analyzed the distribution of nuclear β-catenin in both normal and experimentally manipulated embryos. In unperturbed embryos, β-catenin accumulates in nuclei that include the precursors of the endoderm and mesoderm, suggesting that it plays a role in vegetal specification. Using pharmacological, embryological and molecular approaches, we determined the function of β-catenin in vegetal development by examining the relationship between the pattern of nuclear β-catenin and the formation of endodermal and mesodermal tissues. Treatment of embryos with LiCl, a known vegetalizing agent, caused both an enhancement in the levels of nuclear β-catenin and an expansion in the pattern of nuclear β-catenin that coincided with an increase in endoderm and mesoderm. Conversely, overexpression of a sea urchin cadherin blocked the accumulation of nuclear β-catenin and consequently inhibited the formation of endodermal and mesodermal tissues including micromere-derived skeletogenic mesenchyme. In addition, nuclear β-catenin-deficient micromeres failed to induce a secondary axis when transplanted to the animal pole of uninjected host embryos, indicating that nuclear β-catenin also plays a role in the production of micromere-derived signals. To examine further the relationship between nuclear β-catenin in vegetal nuclei and micromere signaling, we performed both transplantations and deletions of micromeres at the 16-cell stage and demonstrated that the accumulation of β-catenin in vegetal nuclei does not require micromere-derived cues. Moreover, we demonstrate that cell autonomous signals appear to regulate the pattern of nuclear β-catenin since dissociated blastomeres possessed nuclear β-catenin in approximately the same proportion as that seen in intact embryos. Together, these data show that the accumulation of β-catenin in nuclei of vegetal cells is regulated cell autonomously and that this localization is required for the establishment of all vegetal cell fates and the production of micromere-derived signals.