Studies in Caenorhabditis elegans and vertebrates have established that the MAP kinase-related protein NLK counteracts Wnt signalling by downregulating the transcription factor TCF. Here, we present evidence that during early development of the sea urchin embryo, NLK is expressed in the mesodermal precursors in response to Notch signalling and directs their fate by downregulating TCF. The expression pattern of nlk is strikingly similar to that of Delta and the two genes regulate the expression of each other. nlk overexpression, like ectopic activation of Notch signalling, provoked massive formation of mesoderm and associated epithelial mesenchymal transition. NLK function was found to be redundant with that of the MAP kinase ERK during mesoderm formation and to require the activity of the activating kinase TAK1. In addition, the sea urchin NLK, like its vertebrate counterpart, antagonizes the activity of the transcription factor TCF. Finally, activating the expression of a TCF-VP16 construct at blastula stages strongly inhibits endoderm and mesoderm formation, indicating that while TCF activity is required early for launching the endomesoderm gene regulatory network, it has to be downregulated at blastula stage in the mesodermal lineage. Taken together, our results indicate that the evolutionarily conserved TAK/NLK regulatory pathway has been recruited downstream of the Notch/Delta pathway in the sea urchin to switch off TCF-beta-catenin signalling in the mesodermal territory, allowing precursors of this germ layer to segregate from the endomesoderm.