The animal plate of the sea urchin embryo becomes the apical organ, a sensory structure of the larva. In the absence of vegetal signaling, an expanded and unpatterned apical organ forms. To investigate the signaling that restricts the size of the animal plate and patterns neurogenesis, we have expressed molecules that regulate specification of ectoderm in embryos and chimeras. Enhancing oral ectoderm suppresses serotonergic neuron differentiation, whereas enhancing aboral or ciliary band ectoderm increases differentiation of serotonergic neurons. In embryos in which vegetal signaling is blocked, Nodal expression does not reduce the size of the thickened animal plate; however, almost no neurons form. Expression of BMP in the absence of vegetal signaling also does not restrict the size of the animal plate, but abundant serotonergic neurons form. In chimeras in which vegetal signaling is blocked in the entire embryo, and one half of the embryo expresses Nodal, serotonergic neuron formation is suppressed in both halves. In similar chimeras in which vegetal signaling is blocked and one half of the embryo expresses Goosecoid (Gsc), serotonergic neurons form only in the half of the embryo not expressing Gsc. We propose that neurogenesis is specified by a maternal program that is restricted to the animal pole by signaling that is dependent on nuclearization of beta-catenin and specifies ciliary band ectoderm. Subsequently, neurogenesis in the animal plate is patterned by suppression of serotonergic neuron formation by Nodal. Like other metazoans, echinoderms appear to have a phase of neural development during which the specification of ectoderm restricts and patterns neurogenesis.