We have identified an NK2 family homeodomain transcription factor, SpNK2.1, in the sea urchin Strongylocentrotus purpuratus whose transcripts are initially detected within the apical plate ectoderm of the hatching blastula and are confined to the apical organ at least through 2 weeks of development. Protein localization studies demonstrate that SpNK2.1 is restricted to the apical plate epithelium, but is excluded from the nucleus of serotonergic neurons. The expression profile of SpNK2.1 is dictated via two separate regulatory systems. Initially, SpNK2.1 is restricted to the apical pole domain by beta-catenin-dependent processes operating along the animal-vegetal axis, as evidenced by an expansion of SpNK2.1 expression upon cadherin overexpression. Starting at gastrulation, expression in the apical plate is maintained by SpDri, the sea urchin orthologue of dead ringer. Abrogation of SpDri results in the downregulation of SpNK2.1 after gastrulation, but SpDri is not necessary for the initial activation of SpNK2.1. Loss of function experiments using SpNK2.1-specific morpholino antisense oligonucleotides and SpNK2.1 overexpression experiments do not disrupt embryonic development and have no effect upon the development of neuronal components of the apical organ. Nonetheless, SpNK2.1 defines a new early territory of the sea urchin embryo.